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Resistance or
the rally?
Stocks rallies sharply again yesterday with the Dow gaining 152-points.
Some of the major indices are now up against resistance so what will win out
- the resistance or the rally?
For the TSP, the C-fund was up 1.01% yesterday, the S-fund
gained 0.85%, the I-fund
jumped 1.64%, and the F-fund (bonds) fell 0.09%.
My internet connection went down for a few hours Thursday night so I am
getting a late start and will make this brief.
After rallying 50+ points in the last 4-days, the S&P 500 is hitting the
next level of resistance. Certainly a little pause seems reasonable,
but it is the first day of a new month and a new quarter, and it is the day
before a long holiday weekend, so who knows what we can expect?
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
Taking a look at the market leaders we see that the Nasdaq is also up
against resistance...
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
... but the resilient Dow Transportation index has broken above it.
That's a good sign, particularly considering that the price of oil is up about $6 in the last few
days.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
Over the last year, new months have often brought with them market
reversals. I see 8 out of the last 12 month and 4 in a row. Can
the streak be broken in July and we see a continuation in the rally today,
and after the holiday?
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
The trading day prior to
the 4th of July (today) has a history of being quite positive, but things
cool down for a couple of days afterward - historically, but in general the
first couple of weeks in July are pretty strong, but it can be volatile.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The
TSP Talk Sentiment Survey
came in at 50% bulls, 37% bears,
for a bulls to bears ratio of 1.35 to 1. That is a neutral reading so the
system's allocation remains 100% S-Fund
for next week. The
system is up 7.99% for 2011 through Thursday's close.
Thanks for reading! Have a great holiday weekend! Happy
Birthday U.S.A.! Tom Crowley
Click here to discuss today's Market Commentary
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