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Market Comments July 14, 2011 Current TSP Share Prices Twitter

Today's Commentary

Testing support It was another wild day on Wall Street yesterday.  If you checked the numbers at the end of the day and saw a 45-point gain in the Dow, and the modest gains in the other major indices, it would not tell the whole story.  Having been up 160-points earlier in the day, the 45-point gains looks more like a victory for the bears.            The Dow closed about where it opened. For the TSP, the C-fund gained 0.32% yesterday, the S-fund was up 0.64%, and the I-fund jumped 1.68% as the dollar fell sharply and the European markets closed before our U.S. stocks lost much of their gains.  The F-fund (bonds) gained 0.12%.  The S&P 500 shows the intraday reversal and these negative "kangaroo tail" like reversals tend to set up downside follow-through action, but I don't want to completely give up on the support yet.  The 20 and 50-day EMA's and two trend lines are still holding up... at least for now.                                                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk If you recall last month we were dealing with a similar situation as the 200-day EMA and the long-term bull market support line were holding up the market near 1260 and we held our breath on each test. The Dow Transports held onto a 0.6% gain yesterday and it also remains above the 20-day EMA and recent support lines.                                                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk That type of chart activity makes me bullish today, but if these support areas break, I can easily move back into the bearish camp.  And after the close yesterday, Moody's said it is reviewing the U.S.'s AAA debt rating and may consider dropping it if the debt ceiling situation is not resolved.  Stocks were down in after hours trading on this news and that jeopardizes the support on the charts. The sharp sell-off on Tuesday pushed the S&P 500's down pressure indicator down to levels that could indicate another rebound is likely.                                                               Chart provided courtesy of www.sentimentrader.com According to Jason at SentimenTrader.com: "This means that over the past three trading days in the component stocks in the S&P, more than 86% of the volume has been down volume and 86% of the points gained or lost have been lost.   "There have been 17 other days when the Down Pressure was this extreme since July 2002 when we began tracking it.   "Of those 17 days, the S&P sported a positive return two sessions later 16 times, averaging +1.8%. This includes several instances during the prior bear markets."                                                           Chart provided courtesy of www.sentimentrader.com With support just below on the charts, and the recent extreme selling pressure, I am positioned to take advantage of a rally.  Should support break I will get my trigger finger ready for a possible change in allocation. Thanks for reading!   We'll see you back here tomorrow. Tom Crowley Click here to discuss today's Market Commentary

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