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| Today's Comments (Short Term Outlook) |
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Has the pullback begun? Another bad day for stocks yesterday as the Dow tacked on another loss of 186-points after Friday's 75-point smack down. The TSP stock funds dropped between 2.4% and 3%, and the F-fund picked up 0.17%. The S&P 500 closed at its lowest level since July, fell below the 20-day EMA, but is certainly still within the uptrend. The overhead resistance had been barely holding, but seems to have won the battle for now. We have been looking forward to a pullback to begin and now it is probbably just a matter of how serious it will be. We don't want to jump the gun though, as the index is just 3.4% off the recent high, but a move down to 940-950 would be a healthy move for stocks.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk There is a lot of support in the mid-900's, and there is still that open gap at 906. If that can get filled and / or the trendlines and moving averages can hold, I would be willing to do some buying. That would be with the understanding that if support is broken, or the technical picture is damaged in any other way, I would have to jump back into safety. Of course the other option is that the market might just start rallying again today. That would likely leave behind the bears again, who have been waiting for a better buying opportunity to buy. That sounds about right for this market lately - frustrating the bears. The NYSE overbought/oversold indicator is now at -464. Since this rally began back in March, there have been no readings below -500. Could that mean we might see some support in the next few days? Could be, but if -500 does break, that will be the end of that and you'd have to believe we will see -1000, where many pullbacks eventually fall.
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