For the TSP, the C-fund lost 0.80% on Friday, the S-fund dropped 1.21%, the I-fund was down 0.99%, and the F-fund (bonds) added 0.16%.  For more on the weekly and monthly returns, please see our TSP Weekly Wrap-Up.

The S&P 500 is clearly in a long-term uptrend and making money in the market is a lot tougher if you fight the trend.  Of course if you happen to be lucky enough to sell just before the uptrend ends, basically selling close to the top, then more power to you.  We do see a sell signal on the PMO indicator below but for the most part it may be best to assume that this trend will not break because in a bull market, you should anticipate a bullish outcome.
                        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Playing devil's advocate, if the rising trend does break and you had not sold yet then you obviously missed a chance to sell at the top.  But a new longer-term downtrend or bear market does not end in a matter of weeks so we should have plenty of opportunities to get more defensive should the current bull market end.

I am going into assume that the S&P 500 will find support and that we won't see any prices below 1315 for any length of time.  That is based on both the short and long-term support of this current bull market, and the open gap on the chart near that 1315 level.

                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The Dow is still trading above the purple crayon line...

                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

As is the Nasdaq...
           
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The Dow Transportation Index did not form an inverted head and shoulders like the other major indices, and its purple crayon support line does appear to be broken, but it is testing support of the intermediate-term (about 12-weeks) rising trading channel.
           
                        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

So I could easily turn bearish if these support levels are taken out, but until they do I don't have a good reason to sell - at least from a technical analysis standpoint.

The TSP Talk Sentiment Survey came in at 1.18 to 1 bulls (46%) to bears (39%) ratio. That is a neutral reading so the system's allocation remains 100% S-Fund for this week.  The system is currently up 9.07% in 2011, through Friday's close.

The AAII Investor Sentiment Survey (not our survey) came in at 30.77% bulls and 35.5% bears.  SentimenTrader.com put together data showing how the market performed from 1987 thru 2011 when the S&P 500 was within 2% of a new 52-week high, and the AAII Bullish percentage was below 31%.
           
                                        Chart provided courtesy of www.sentimentrader.com

From Jason at www.sentimentrader.com:

"The market's performance going forward was good - except for two months later, stocks were more consistently positive than they were any random time during the study period.

"The question that's most interesting is "Is the market likely to form a major top when individuals are this apathetic?". The answer looks to be no. Only one occurrence led to more than a -10% drop at the worst point during the next six months."

Thanks for reading!  We'll see you back here tomorrow.