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Stalemate

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01/24/12

The early Monday morning rally was quickly sold off, but the bulls stepped up and pushed the indices back toward the break-even area. The Dow lost 12-points on the day.


For the TSP, the C-fund was up 0.05% yesterday, the S-fund fell 0.08%, the I-fund gained 1.06%, and the F-fund (bonds) lost 0.07%.

The S&P 500 has been in a melt up for the last several weeks. Although the gains have been less than a point each of the last two days, the S&P has now closed in positive territory for 5 straight days, 9 of the last 10 days, 12 of 14, and 18 of the last 22 days. That is quite a run.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk


Longer-term, it's clear that we are in an uptrend since the bottom in October, but the S&P is about to deal with some longer-term overhead resistance. We are in a new bull market (officially since the 50-day EMA moved above the 200-day EMA the first week of the year) and we can probably safely buy any pullbacks from here.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk


Short-term support is right at the bottom of the blue trading channel, but we're seeing the index move quite a bit above the longer-term support so that could make any pullback target that much deeper.

The market leading Dow Transportation Index, may be leading the way on a pullback as it has actually been down 4 of the last 6 days, and yesterday's 0.8% decline produced a lower low compared to Friday's action.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk


It would be a nice healthy move to see the Trannies fall back to test the neckline of the recently broken inverted head and shoulders pattern.


If that happens, and the neckline holds, it would be a great place to be a buyer if you are looking to buy. I would expect the S&P 500 to follow closely behind.

Thanks for reading! We'll see you back here tomorrow.

Tom Crowley


The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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