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Today's Comments (Short Term Outlook)
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Stocks and bonds get pounded Another 2% day for stocks as this time they lost 2%, giving back a large portion of Tuesday's big rally. At the same time, bonds continued their slide as yields move higher. The S&P 500 continues to confound both the bulls and the bears, as each time one of them believes the market is about to move their way, things quickly move in the opposite direction. The large rallies are draining the bears, but the short-term down trend has some bulls worried. As far as the TSP goes, I'm not so much interested in the day to day ups and downs as much as I am about trying to figure out if we have seen an intermediate-term top in a bear market rally, or if these pullbacks should be bought.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The recent uptrend appears to be broken, while MACD indicator is still telling us that the recent rally may not be "all that". Also, while stocks have moved higher, the MACD has clearly showing a divergence as it has moved lower. The PMO indicator has moved into a sell signal after it crossed below the 10-day moving average. It's not shown here, but the ARMS Index is actually closer to a buy signal, although I have abandoned this indicator over the last year because of several false signals. We've had similar problems with the OEX put / call ratio that acts as a smart money indicator. That one is giving a sell signal but it too has not been very reliable in the last several months. The NYSE is just north of the neutral line and not giving us much to go on. The only thing we might say is that the market "is due" to get oversold as it has been neutral to overbought since mid-March.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Despite my analysis that bonds may be worth a play because they are oversold, were near support, and bond sentiment was overly bearish, bonds have continued to decline.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The MACD is giving us some additional hope as the decline in the 30-year T-Bond has not been confirmed on the MACD, which has stayed level at worst. This divergence is the opposite of what we have seen in the S&P 500 as stocks have gone up while the MACD has moved down. Today is our Sentiment Survey day and I will post the poll here as I am very curious what everyone thinks after the last two days. The moves have been wild. So what do you think? Where does the market go next week?
That's all for today. Thanks for
reading! We'll see you back here tomorrow. |