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Troubling action now testing support Free access to The EbbChart System all this week.  See below for details. Stocks were rocked yesterday as the dollar rallied sending commodities lower.  The Dow lost 130-points on the day and most major indices are now hanging precipitously above support.              For the TSP, the C-fund lost 1.06% yesterday, the S-fund fell 1.37%, the I-fund gave up 0.83%, and the F-fund (bonds) gained 0.17%.  The S&P 500 fell 1.1%, testing the old neckline support again.  There is some support below that level but if the neckline breaks, it could trigger more sellers to step up.  Being in a bull market, we should not be surprised to see the market rally from here, but if we start seeing support break (and remember the 3 to 5 day rule) we'll want to have a plan in place to avoid a possible correction.                                                                                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Here's a longer-term  view of the S&P and it kind of puts yesterday's sell-off in perspective.  We are in a strong bull market and yesterday was a down day in the bull market.  In the short-term, we are seeing some cracks if things don't turn around quickly.  In the longer-term, there is room on both the upside, and the downside.                                                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Once again the dollar had a large impact on the market.  It started rallying in the early morning hours on Wednesday, and that had a big impact on commodity and stock prices... Here's the intra-day chart of the dollar (including the overnight trading on Wednesday morning.)  The period between the red dotted lines shows when the stock market was open for trading on Wednesday.                           And here is an intra-day chart of the S&P 500 between 9:30 AM and 4 PM ET...                The areas between the red dotted lines are almost mirror images of each other. Like the S&P 500, the dollar is also in a long-term trend, but it is a down trend.  In this dollar bear market, we should anticipate bearish results, but in the short-term perhaps we will see a rally to disrupt the stock market a little.  The 200-day EMA is above as a possible target for a bear market rally. Yesterday's action looks a possible start of a breakout from a small bull flag in the dollar, which would be bullish in the short-term, but we've seen these before and they actually turned out to be short-term peaks.  We shall see.                                                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk We will be getting some economic data this morning, the PPI and initial jobless claims, both of which could be a market mover if they come in well above or below estimates.  Watch that neckline support level on the S&P 500.  The dollar may be the catalyst but traders are watching those support levels closely to see if they should buy stocks if it holds, or sell stocks if it breaks down. Administrative Note:  The EbbChart System premium service will be free all this week!  Click here for access. Thanks for reading!  We'll see you back here tomorrow!   Click here to discuss today's Market Commentary Tom Crowley

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