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Today's Commentary

Filled Stocks took another tumble yesterday as the debt problems in Europe continue to pressure on U.S. stocks.  The Dow lost 131-points, but we had saw a possible positive technical sign. For the TSP, the C-fund was down 01.19% yesterday, the S-fund lost 1.64%, the I-fund dropped 2.33%, and the F-fund (bonds) added 0.07%.  The S&P 500 lost 1.2% on the day. but just after noon ET time the index hit a low of 1312.88 before starting a minor relief rally.  What is the significance of 1312.88, or 1313?                                      On April 19 of this the S&P 500 hit a high of 1,312.70 (or 1313), and on April 20 the low on the S&P was 1319.12.  That left an open gap on the chart between 1313 and 1319.  Yesterday's sell-off found support after finally filling the open gap that we have nervously been watching for the last 4 or 5 weeks.  There is also some short-term support in the same area from the new descending trading channel.                                                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Even the huge open gap on the Nasdaq chart was filled yesterday.  Ironically, yesterday's sell-off opened another large gap on the Nasdaq chart, but this time the market will have to go up to get it filled.                                                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I probably would have noticed the gaps being closed while doing my nightly research, but it didn't dawn on me yesterday until our message board member, pmcint01 alertly pointed it out to us, so thanks pmcint01! Of course filling a gap does not automatically mean we have seen the bottom of this pullback, but many times it does.  As I have been saying for weeks, these open gaps can act like magnets on the indices, and once the gaps get filled, the pull or attraction is alleviated. Much of the pressure on U.S. stocks is coming from the debt problems in Europe.  because of that, the U.S. dollar is strengthening against the European currencies, and a strong dollar makes it a little tougher on stocks and commodities, as we have been seeing.                                                             Chart provided courtesy of www.sentimentrader.com Technically, the dollar has now broken out of a bull flag after last week's consolidation.  Unfortunately for U.S. stocks and the European currencies, the dollar seems to be making a beeline for the 200-day EMA near 77.70.  Thanks for reading!  We'll see you back here tomorrow.   Click here to discuss today's Market Commentary Tom Crowley

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