Today's Comments (Short Term Outlook)                            Printer  friendly

Pulling back Stocks lost more ground yesterday as the Dow dropped 96-points and all of the TSP stock funds closed in the red.  The F-Fund (bonds) were up modestly. The S&P 500 remains in an intermediate-term uptrend but we could finally be getting the overbought pullback we have anticipated.  There is room on the downside, but support should kick in between 940 and 950.  Also, the 20-day EMA is now 977, which could act as temporary support. Volume was very light during the last two down days, which could be a good sign going forward.  If the downside continues over the next few days, I will be keeping an eye on volume to see if any of the big money starts selling.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The 50-day exponential moving average (EMA) has now officially crossed over the 200-day EMA.  This could be a long-term bullish signal for the market, but it could also be a short-term overbought sign as well.  Assuming it holds, this crossover will move our Sentiment Survey System into bull market rules for next week. The market leader, Dow Jones Transportation Index has improved greatly over the last few weeks, but like the S&P 500, it is up against some resistance, but unlike the Nasdaq, which we talked about the other day, the long-term overhead bearish trendline is significantly higher.  In other words, we could see a rally of 750-800 points on the Transports and the chart would still officially be in a long-term downtrend.                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Here's another look at the Nasdaq chart showing how close it is to breaking the long-term  downtrend.  The question is, will it break above it or will the trend hold and we get a significant pullback?                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The fact that the index is trading above all of the major moving averages is a good sign that we could see the upside breakout.  But if the Nasdaq trades back below that 200-day EMA, then we'll have to rethink things. Today at 2:15 PM ET the Fed will be announcing their new policy statement and any changes to interest rates.  Most expect no changes, which means if there are any surprises, the market could see a significant move.  Which way that will be, we don't yet know. That's all for today.  Thanks for reading!  See you back here tomorrow!