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Today's Comments (Short Term Outlook)
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Could have been worse Stocks began yesterday with some terrible numbers in the futures market, with the Dow futures down about 140-points, but when the market opened up, things weren't quite as bad as it appeared it would be. They were evacuating building in New York because of low flying jets, a swine flu outbreak that seems to be a world-wide concern, the government becoming part owner of a car company, and yet the Dow only lost 51-points on the day. I'm not sure how long this rally will last, but things certainly could have been a lot worse yesterday. The S&P 500 has closed toward the lower end of the recent tight rising trend, after breaking out of the longer-term declining trend earlier in the month. Volume was particularly light yesterday for some reason. It was pre-holiday type numbers. Perhaps traders around the world called in sick to avoid taking mass transit yesterday (flu) - who knows? I'm not sure what to make of it.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk We looked at the economically sensitive Dow Transportation index the other day, and it was coming up against the declining trendline - something the other major indices have been able to conquer. On Friday it did poke its head above the resistance, but closed just below it. Yesterday the index led the market weakness as it fell nearly 5%.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk It is now back in its own narrow rising trading channel, flirting with the bottom just like the S&P 500. It seems the market is in a do or die situation again. The last few test have passed and the uptrend continued. The problem is, if it doesn't hold, there is very little support below should this immediate support give way, and... Tuesday morning, 1:00 AM. Dow futures down 100-points again. Looking at the April seasonality chart below, we see that the last three days of the month have a decent history - although there are only 21 days this April, not 22. And, as we mentioned yesterday, the first few days of May are pretty good as well. But things turn more negative after that. That's all for today. Thanks for reading! See you back here tomorrow. Scribbler's TSP & Economic Report: Only a few days left in the free trial period. Please click here for more information. |