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Today's Comments (Short Term Outlook)
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Confidence A much higher than expected Consumer Confidence report triggered a big rally on Wall Street yesterday. The TSP stock funds picked up an impressive 1.5% to 3.7% on the day. The May Consumer Confidence reports came it at 54.9, well ahead of the 42.6 consensus estimate, and more than double the figures we saw in February (25.3) and March (26.9). So, stocks rallied but remain in their short term down trend. The bulls are looking for a move back above the highs made earlier this month, and the bears are using strength to lighten up on their positions.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Let's take a quick look at the leaders - the Nasdaq and the Dow Transportation Index: The chart of the Nasdaq looks better than the S&P 500 as it did make a new 2009 high in May, where the S&P has not. It is also back above its 200-day moving average after pulling back below it last week.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The Dow Transports are lagging. You can see that, not only is this index finding strong resistance at the 200-day moving average, but it is well below the the high made in January of this year, and even after gaining 4% yesterday, is still about 10% below the peak made a couple of weeks ago.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk One positive is that it continues to bounce off of the 50-day moving average. We'll have to see if this new downtrend is going to act as resistance. The market is still mildly overbought and yesterday's rally kind of came out of nowhere, so I don't know exactly what to expect in the short-term, as we are seeing some mixed signals from the indicators, but I do plan to continue to play defense. That's all for today. Thanks for reading! We'll see you back here tomorrow. |