For the TSP, the C-fund lost 0.08 yesterday, the S-fund fell 0.25%, the I-fund gained 0.49%, and the F-fund (bonds) added 0.04%. 

The good news is, the S&P was able to hold above the support levels we have been watching, including the bottom of the open gap near 1313.  The bad news is it wasn't able to do much more than that, and in overnight trading the indices are sharply lower, and if that holds, we should see that support break at the open.

The S&P has now closed below the 50-day EMA for the 2nd straight day.  Three would not be good, but we have to give an asterisk to the fact that this is a pre-holiday week and trading can be a little skewed during holiday weeks.  Many times the market will reverse course after a holiday. 

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

The market leader Dow Transportation Index is in a downtrend like the S&P 500, but it has held the 50-day EMA so far.  Of course we will have to see what happens in the morning before declaring any kind of victory here.

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

We know that sentiment has been very bearish lately, and stocks tend to stop going down when the bearishness gets extreme, but perhaps the market needs a high volume "washout" kind of day.  The recent decline has been on muted volume and a big sell-off may be what the doctor ordered to turn this thing around.

The put/call ratios are showing us more evidence of just how bearish the dumb money is getting (which is bullish for stocks) while the smart money, which had been very bearish, is well off of the extreme levels we saw a week or two ago.


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

A few of our premium services have side-stepped the falling market in the last week or two, but I have remained stubbornly bullish, mainly because of the bearish sentiment readings, but also because I didn't want to use my last IFT in May to sell a couple of weeks ago.  Doing that cost me some gains in April, but this month not selling has cost me.  You have to love (sarcasm) these transfer limits. It's hard enough being a market timer, but having to consider the number of transfers you make each month makes it that much more difficult.

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