|
|
Today's Commentary
|
3 to 5 day test
Stocks opened weaker yesterday but the market quickly found its footing and
headed rallied into the afternoon. The indices moved sideways until
the last hour of trading when a strange, short, sharp rally manifested, but
almost as quickly as it went up, things settled back down and the Dow closed
up 38-points.
For the TSP, the C-fund was up 0.32% yesterday, the S-fund gained 0.99%, the
I-fund added 0.23%, and the F-fund (bonds) slipped 0.02%.
The S&P 500 tested the open gap again before heading higher, and
the late afternoon rally created an "outside day" where the day's high was
higher than Tuesday's high, and the low was lower than Tuesday's low.
Had the S&P closed a little higher I would have called this an outside
reversal day, but the modest 0.3% gain makes it less interesting.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
The 50-day EMA is an issue as the S&P has now closed below it for a third
straight day. If it was not for it being a holiday week I would be a
little more worried about that but post-holiday reversals are common so I
will give it a few more days.
If we start seeing 5 or 6 days below the
50-day EMA, I may have to rethink things, but during a bull market run, the
market tends to cling to either 20 or 50-day EMA. In the latter part
of 2006 a sharp ascending rally kept the S&P above the 20-day EMA, while
earlier that year we saw the S&P hanging out with the 50-day EMA.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
You can see that 3 to 5 days below either
of the EMA's was enough wiggle room before the rally resumed. After
that however, not so much.
Another concern for the market
is the break of the longer-term trend. Again, the holiday makes this a
mixed signal. Should this breakdown hold, the old support line could
easily become resistance. So, we have enough warning signs to be
concerned, but we have perhaps a week at most before we need to see this
pullback cease, otherwise we may have to start thinking of going into "sell
the rally" mode.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
Here's another look at
the 1950-2004 historical seasonality surrounding Memorial Day Weekend.
Today would be day -2. Friday of this week, and Thursday and Friday of
next week appear to have the most historical strength.
Chart provided courtesy of www.sentimentrader.com
Thanks for reading! We'll see you back here tomorrow.
Click here to discuss today's Market Commentary
Tom Crowley
|
TSP Talk does not guarantee the
accuracy or completeness of this report, nor does TSPtalk.com assume any
liability for any loss that may result from reliance by any person upon any such
information or opinions. Such information and opinions are subject to change
without notice and are for general information only. The information
contained on this website is for educational purposes only and not intended to
be recommendations, and may not be published, broadcast, rewritten or otherwise
distributed without prior written consent from TSPtalk.com.
Copyright © 2003 - 2011
Buy Low Sell High, Inc.
TSPtalk.com® is a trademark of Buy Low Sell High, Inc.
All Rights Reserved
Buy Low Sell High, Inc., P.O. Box 13213, Ogden UT 84412
|
