TSP Talk Blog

2/23/12

For one of the few times this year, the market just looked tired yesterday. Dip buyers showed up mid-day, but they could not keep the indices up. The losses were minor and at this point, even the bulls probably would welcome some lower prices to buy later.


For the TSP, the C-fund was down 0.33% yesterday, the S-fund lost 0.58%, the I-fund fell 0.65%, and the F-fund (bonds) was up 0.19%.

The S&P 500 is still below the 2011 high, and while it is not official since the sharp uptrend is still intact, other indices suggest this could be a double top here - at least temporarily.


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

The MACD indicator has been in a negative divergence all year and you can see that it is now below -0- despite the index being within a hair of a new high.

The sentiment surveys are mixed but they only tells us what people say they are doing with their money. The Rydex Asset Ratio tells us what people are actually doing with their money and investors are as bullish now, based on allocations, as they have been at some prior market tops, whether short-term or intermediate-term.


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

The Dow Transportation Index closed below the 50-day EMA yesterday for the first time since the pre-Christmas dip.


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

The small caps are still above their 20-day EMA, but like the Dow Transports did earlier this month, the Russell 2000 Index has now broken below its intermediate-term rising trading channel.


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

When the leaders are faltering, it is not an automatic sell for the S&P 500, but considering the magnitude if the recent rally, it sure could use a little rest too.

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

Tom Crowley


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