TSP Talk Blog

01/25/12

Stocks opened lower on Tuesday, but quickly came off of their lows and traded in a tight range from there into the close. The Dow lost 33-points, the S&P was down a point, and the Nasdaq was up a couple of points.


For the TSP, the C-fund slipped 0.10% yesterday, the S-fund gained 0.52%, the I-fund lost 0.77%, and the F-fund (bonds) added 0.01%.

The S&P 500 continues to push against the longer-term overhead resistance (red), while remaining in both an intermediate-term (purple), and short-term (blue) uptrend.


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

I won't rehash the continued bearishness we are seeing from the indicators, and at this point, a pullback would be healthy as the S&P is quite extended over any strong support.

As we showed with Intel last week, Apple also has a tendency to produce a 'sell the news' reaction after one of its standard great earnings reports.


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

After the earnings were announced last night, the stock shot up 7% or 8% in after hours trading, sending it to new highs. Barring any major collapse before the market opens on Wednesday, this would qualify to be in the chart above where you can see that up to month later, the leading Index Nasdaq 100 struggles.

This week's FOMC meeting wraps up today and we should get a policy statement some time after 2 PM ET. There was a time when the Fed would raise or lower interest rates based on economic conditions but for quite some time now we're stuck at rates near 0% and, barring some kind of a surprise quantitative easing announcement, there's not much that is likely to be done under the current circumstances.

Still, the Fed has the ability to significantly change investor sentiment with one positive or negative sentence, so I would still anticipate some volatility after the announcement.

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

Tom Crowley


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