Rally!
Stocks rallied sharply yesterday improving the technical picture some,
but we are not out of the woods yet. The Dow gained 275-points on
the day, making it two in a row after the long dry spell.
For the TSP, the
C-fund jumped 3.18%, the S-fund gained 3.61%, and the I fund rallied
2.58%. The F-fund
(bonds) was down 0.12%.
I have to make this quick today as I am sitting in a hotel room in a
small town in Idaho and the internet connection is pretty slow. I
have only enough patients to update the premium services' reports, the
share prices, and make a quick observation.
The market obviously had a great day yesterday with gains in the plus 3%
range. The most impressive thing to me was the S&P 500's ability
to regain the neckline area of the head and shoulders so easily.
It sure got my attention, but a two day rally in a bear market can get
you leaning the wrong way. If not for that last hour surge, the
50-day EMA would have closed below the 200-day EMA, and we would have
had an "official" bear market. Instead, the 50 EMA is still barely
hanging above the 200 EMA.
Now we have a two-day rally in an "almost" bear market, and rallies need
to be sold in bear markets. So, the action over the next couple of
days is very important. It's that rule of not jumping to
conclusions until a new trend shows us it can hold for 3 to 5 days.
We have some important economic reports coming out this morning, and
earnings season is nearly upon us, so we could see some swings.
The market will do whatever it can to get us to lean the wrong way.
Let's see how it reacts to some of the indicators coming off of their
oversold levels, and I am curious to see how today's sentiment survey
turns out.
Thanks for reading. I should be back on my regular schedule by
Thursday night. We'll see you back here tomorrow!
Tom Crowley
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