Market Comments

July 13, 2007

 

Fund share prices as of: 7/12/07
Fund - G Fund F Fund C Fund S Fund I Fund
12.01 11.23 17.29 21.15 25.48
$  Change - +0.00 -0.02 +0.32 +0.29 +0.39
% Change - +0.00% -0.18% +1.89% +1.39% +1.55%
  L2040 L2030 L2020 L2010 L Income
18.74 17.77 16.87 15.42 13.31
$  Change - +0.26 +0.22 +0.18 +0.10 +0.05
% Change - +1.41% +1.25% +1.08% +0.65% +0.38%



Today's Comments (Short Term Outlook)                             Printer friendly
What the...
If the Dow was up 83 points yesterday, I would have said, "I didn't see that coming."  If it was up 183 points I would say, "What is going on here?"  But it was up 283 points and I am speechless.  The two toughest commentaries to write are the ones after the market is down big and we are in stocks, and after stocks are up big and we are out of stocks.

The EbbChart System has been unconscious lately.  It was out of the market when the Dow was down 143 Tuesday.  It was in the F-fund the other day when it was up .06 cents.  And yesterday it was in the market for the huge rally.  Maybe there is some luck involved but that is very impressive and is now up 17.86% for the year!  Today it is back in the G-fund.

As I said yesterday, I like this market looking out to the end of the year, but never did I think we would see the kind of strength we saw yesterday until after we had a significant pullback.  The only thing I can think of is that green sore thumb sticking out of the July seasonality chart.  That is, that the 9th trading day in July is very positive historically for some reason, just before a mid-July slowdown.  Perhaps it came a day early as yesterday was only the 8th trading day in July.
                                 Chart provided courtesy of www.sentimentrader.com

I don't really have any charts to show you that will give us a good indication of what is next.  The extreme short-term indicators are overbought, but that is to be expected, but my usual indicators are not at any extreme levels.

Even the sentiment surveys came in neutral.  The AAII survey came in at 1.47 to 1 bulls to bears, and the TSP Talk Survey came in at 1.74 to 1 bulls to bears.  That leaves the Survey System on a sell signal and 100% G-fund for next week.

There is one indicator that I don't usually follow, that gave us a weak short-term outlook and that is the daily ARMs Index.  I do follow the 10-day moving average of the ARMs index, which is still neutral, but not the daily reading.  But Sentimentrader.com had this to say about yesterday's daily reading:
 

"The Arms Index (aka TRIN) for both the NYSE and Nasdaq dropped like a rock today, closing at one of the lowest levels we ever see.  In the last half-hour of trading, there was a rush of volume into today's winning stocks - kind of a mini buying panic.  As you might guess, stocks haven't fared so well when we've seen that in the past.

 

Over the past year, the NYSE Arms Index has closed below 0.5 on eight separate occasions.  A week later, the S&P 500 showed a positive return only twice, and the average maximum loss (-1.5%) was three times greater than the average maximum gain (+0.5%)."
 

Trader Fred's TSP Trader System is still on a sell signal.  Read more from Fred on the system page.

The EbbChart System is in the G-fund today after yesterday's big gains.  But guess what?  It's moving again this morning.  Read more on the ebbchart page.

 That's all for today.  I am currently 100% G fund.  Have a great weekend!
 

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