Post holiday blahs
Stocks performed in typical holiday fashion Tuesday
as the indices were up early and the bulls were able
to keep it afloat the entire day. Now that the
4th of July is behind us, the strong seasonality
backs off a bit for a couple of days. Volume
will again be very light and, based on the chart
below, it would not be a surprise to
see the indices finish flat to slightly higher,
despite the market being quite overbought.
That is, unless something
significant happens news-wise.
Chart provided courtesy of
www.sentimentrader.com
The smart money, as depicted by the OEX options put
/ call ratio, have become more defensive during the
last two trading days. Looking back at prior
instances in the last few years when there’s a
reading near the 2.75 to 1 and greater area, we have
seen big drops follow in the days and weeks ahead,
but in the last year those dips have been very short
in duration and very minor.
Chart provided courtesy of
www.decisionpoint.com
We have seen what can be considered a change in
character in stocks over the past month, but they
have come roaring back in the last week or so.
It will be interesting to see how the market reacts
now. More so on Monday as the holiday trading
is still in progress. Will the smart money
start getting more bullish or will they sell the
strength? I'll keep an eye on this indicator,
which can turn on a dime.
Trader Fred's
TSP
Trader System is now on a buy signal but unless
another submodel moves into a buy mode, a negative
close for the C fund will move the system to a sell
signal. Fred
has also been working on F fund submodels to know
when to use the F fund in lieu of the G fund during
periods when the system is on a sell signal.
We'll see how that works out for us. Read more from Fred on the
system
page.
The EbbChart System
is in G-fund for today and will make another interfund
transfer this morning. Read more on the
ebbchart page.
TSP
Corner has been updated for 7/03/07.
The
longer-term comments for inactive accounts has
also been updated for July.
China is starting to move down toward the low made last month. A
break below 3404 on the Shanghai Composite will confirm a double top.
How the rest of the Asian markets, and U.S. market reacts is an unknown,
but it's something to keep an eye on.That's all
for today.
I am currently 100% G fund. See you tomorrow.
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