Was that the pullback?
by
, 04-25-2012 at 09:55 PM (3473 Views)
4/26/12
Despite some weak economic data, Apple's earnings seemed to be enough to give stocks a boost yesterday as it helped the Nasdaq to a gain of 2.3%, while the S&P added 1.4%. Apple is not in the Dow and it gained 89-points or "just" 0.07%.
For the TSP, the C-fund gained 1.38% yesterday, the S-fund was up 1.77%, the I-fund made 1.20%, and the F-fund (bonds) lost 0.05%.
The S&P 500 is not only back above the 20 and 50-day EMA, but it is now back within the longer-term rising trading channel. That 3 to 5 day rule of not acting on a breakdown paid off.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Last year the "sell in May and go away" axiom played out well as the yearly high was made on the first trading day in May. Next Tuesday is May 1st. The market rarely replays the past exactly, but I thought I'd throw that out there.
The blue dashed descending resistance line turned out to not materialize as it would have only been official if the April low had been taken out, and now that the S&P has broken above it, it may be the last we see of that line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I have more charts than commentary from here down as I just wanted to show how all of the major indices are back above the 200, 50, and 20-day EMA's. That is certainly a good sign for the bull market, but of course one bad day and we could see everything move right back below the 20 and 50 as they are close at hand.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Should we sell in May and go away this year? I'll let the charts tell me, and as of today the technical picture makes selling a hard argument. If things head back down, we'll re-evaluate.
RevShark noted in yesterday's commentary that with earnings season winding down and most major companies having already reported, the market may be a little light on catalysts going forward (possibly why sell in May works). He said, ironically, the most positive catalyst might be weak economic data as it couple open the door for the Fed to implement a QE3 (quantitative easing).
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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