The Nasdaq was down over 40-points early on, but led the way higher and actually closed up 17.56, or 0.7%.  Both of the market leaders (Nasdaq and the Dow Transportation Index) closed higher.
                                 
For the TSP, the C-fund was down 0.28% yesterday, the S-fund gained 0.15%, the I-fund lost 1.15%, and the F-fund (bonds) was up 0.27%.

This was the second consecutive reversal day for the major indices; Wednesday's was negative, and yesterday's was positive.  We saw the 200-day EMA act as support once again but the S&P has to overtake the 50-day EMA, and the descending resistance line, or it will remain in no-man's land waiting for the next leg - up or down.  There is a lot of uncertainty out there.
                        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Volume picked up, which is a good thing to see during a reversal, and the Dow Transportation Index was able to close above the 20 and 50-day EMA's after falling below them in the early trading.
                          
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

We have sentiment indicators that tell us that a rally is due, but we have seen that for weeks.  The charts look bad but the 200-day EMA is holding.  You hate to be selling stocks if the the 200-day EMA is going to be the bottom of this pullback, but we also want to see some of the descending trend lines broken on the upside before embracing a bottom.

The TSP Talk Sentiment Survey came in at 31% bulls, 59% bears, for a bulls to bears ratio of 0.53 to 1.  That is a buy signal so the system's allocation remains 100% S-Fund for next week.  The system is up 4.95% for 2011 through Thursday's close.

Thanks for reading!   Have a great weekend!