We need a breakout ... quickly
Stocks were mostly flat
yesterday with weakness in the small caps and strength in the international
stocks. The Dow added a few points to keep its winning streak alive, as
did the Nasdaq (both 7-days), but the S&P was down a few cents breaking
its 6-day winning streak.
For the TSP funds, the C-fund
was basically flat at -0.01%, the S-fund
gave back 0.22% of Tuesday's large gains, and the I-fund gained 0.90%
with help from a weak dollar. The F-fund (bonds) gained 0.29%.
The S&P 500 has closed above the 200-day EMA for two days now.
I like to see 3 to 5 before calling it a breakout, and with the descending
resistance holding so far, this is a major, imminent test.
Based on some of our indicators, I suspect it will make a solid break above
the 200-day and the descending trend line, but I will have one finger on the
eject button should it instead continue to struggle to move forward.
It sure looks like it wants to go down so a breakout could not come soon
enough.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
A little
follow-up on the Dow Transportation Index
shows that despite the weakness yesterday, this market leader was able to break above
the 50-day EMA, although it does remain in its downtrend below
resistance.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
More follow-up:
The dollar was down again yesterday helping stocks hang in there,
particularly the I-fund. As we mentioned
yesterday,
it has just broken its intermediate-term support line and while I
see the 200-day EMA as the next possible target for this pullback,
sometimes we see oversold rallies when the 20-day EMA crosses below the
50-day EMA, which is happening now.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
Some members of the message board started a thread giving me some very
nice feedback this week about the these daily commentaries. It was
pleasant surprise since I never really know who is reading them.
One member said something about getting a little confused by my flip
flopping between being bullish and bearish, and if one person thinks
that, than I'm sure other think it as well so let me talk about that for
a second.
I am actually proud of my recent ability to change my outlook quickly.
It is something that I have not always been able to do - maybe the last
year or so. I used to be much more stubborn about my market
analysis and predictions. I didn't want to admit when I was wrong,
so I held to my guns and had some bad years because of it.
Maybe it's maturity. Maybe it's experience. But I have
forced myself to be more in tuned with what the market is doing, and not
in what I want it to do, or what I think it will do. I would
ignore obvious signs that things had changed because it did not go along
with my theories. Now I try to be much more open minded, and if
the market is moving in one direction or the other, I try to find
reasons why, rather than ignoring them because my analysis said it
shouldn't be doing that.
So, if you have been wondering the same thing, I hope this helps you
understand. I would also hope that anyone who is making any kind
of market / transfer decisions based on what they read here, that you
try to read every day because as we have seen this year, things can turn
on a dime and our outlook can change with it.
Thank you VERY MUCH for reading. We'll see you back here tomorrow.
Tom Crowley
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