Market Comments May 6, 2009  Current TSP Share Prices

Today's Comments (Short Term Outlook)                            Printer  friendly

Getting stressed? Stocks were down slightly yesterday after Monday's monster rally.  No harm, no foul, as it isn't surprising that investors would get a little nervous before this week's banking stress test and jobs report.        Analysts are expecting that the stress test results will say that all 19 major banks are solvent, but that 10 or 11 of them need more capital to weather a possible deepening of the recession.  I would think that it could set up a sell the news reaction, since it can't get any better than 19 of 19 passing, and that may already be priced in. On Friday we get the April jobs report which is expected to see a loss of 620,000 jobs - slightly lower than March's 663,000 loss.  A surprise in either direction could prove to be a market mover so again investors may be happy to just hold on to recent gains until the report comes out. The S&P 500 backed off of the upper resistance, keeping it within the rising trading channel.  I'm still very aware of the divergence in the MACD which is indicating potential weakness, but until this trading channel breaks, we'll have to assume the S&P should see some support near 860.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Revisiting the housing index, which broke above the 200-day moving average in April, tested the 100 area again yesterday.  With the successful double bottom in March, a recent higher high, the only thing left for the housing index to prove is if it can move over 100, avoiding what happened in December when a small double top failed.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The financials have rallied strongly off of the March low, and is also in a rising trading channel.  The 200-day moving average still looms above and that will be a good test for this index.  You can see that the 200-day moving average stopped the July to September rally last year, although this rally is a lot more consistent and less choppy.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk                            Today may or may not be a quiet day in front of Thursday's stress test results and Friday's jobs report, although there could be a rush for the exit to protect gains before the news.  If it does turn out to be quiet, the fireworks should start kicking in again before the end of the week. That's all for today.  Thanks for reading!  We'll see you back here tomorrow.

Today is the 4th trading day in May:                             Chart provided courtesy of www.sentimentrader.com