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Today's Commentary (Short Term Outlook)
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Nice reversal It was a rollercoaster day on Wall Street yesterday as stocks opened up on the positive side, but quickly ran into serious trouble hitting a low just after noon, but the market bottomed out and rallied the rest of the afternoon. By the end of the day, most indexes closed modestly higher.  For the TSP, the C-fund was up 0.13%, the S-fund gained 0.10%, the I-fund added 0.01%, and the F-fund slipped 0.07%. The S&P 500 put in a nice reversal day as the midday selling had the market quite oversold. Technically, the S&P is still below the 50-day EMA but it did manage to close above that longer-term rising support line after trading below it for most of the day. Still, we saw a lower high and a lower low on the day and it will probably take a positive close today to break the recent short-term downtrend.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The 10-day moving average of the NYSE ARMS index has been trading below the 1.50 area for some time, possibly indicating something is changing. Over the last year we have seen the market rally from readings this low (low on the chart - high in number) but since we first had the 1.50 reading in late April, the market has not been able to produce a sustained rally as the indicator has been pinned below 1.50.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Yesterday's reversal could be a sign that the market is ready to rally again, but I will believe it when I see it. I am still watching that 1070 to 1170 range, as well as the rising support line and the 50-day EMA, to see which way the market wants to go. I am expecting a test of the May 6 low, but if 1170 wants to break on the upside first, then we'll have to give the bulls the benefit of the doubt. Until then, I am staying cautious but impatiently waiting for a buying opportunity. Thanks for reading. We'll see you tomorrow. Tom Crowley |