|
| Today's Commentary (Short Term Outlook) |
|
Looking a little "toppy", but
that's OK Stocks took a little break from rallying yesterday as the Dow was basically flat, but the TSP stock funds dipped a modest 0.3% to 0.5%. Bonds were up nicely. The market is certainly looking good, but as we know, indices don't go straight up, or straight down. It has to do a little breathing and we may be due for a little exhale.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk We talked about the 61.8% Fibonacci retracement level yesterday, so we shouldn't be surprised if we get a little something on the downside. We also talked about the Dow Transports starting to stall, and yesterday they put in an outside reversal day. That means yesterday's (Thursday) high was higher than Wednesday's high, and the low was lower than Wednesday's low. The fact that it closed below yesterday's low makes it a candidate for a possible reversal day. It doesn't mean that things are going to collapse (not yet, anyway), but we could be seeing the start of a pullback to the old resistance line (not bad) or possibly a move the lower end of the trading channel.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk As far as sentiment goes, our TSP Talk Sentiment Survey came in at 55% bulls, 35% bears for a 1.57 to bulls to bears ratio. This would be a big sell signal in a bear market, but it is neutral in this bull market. SentimenTrader.com's Smart Money / Dumb Money Confidence saw the dumb money move up over 70%. This is pretty extreme and usually a sign of at least some short-term pressure for the market.  In the chart below, 32% of their indicators are showing extreme readings in the bearish camp for stocks, and none of their bullish indicators are in extreme territory.  Chart provided courtesy of www.sentimentrader.com This is not contrarian indicator although the indicators within this chart could be. In other words, sentiment is getting extremely bullish and that pushes the bearish indicators into extreme readings. This is a bad sign for stocks. That's all for today. Thanks for reading! Have a great weekend! |