TSP Talk Blog

6/14/12

Stocks were down yesterday on more concerns out of Europe and some mixed economic data. The Dow lost 77-points but it took a very late move up to keep it from a triple digit loss.

Daily TSP Funds Return G-Fund: +0.004% F-fund: +0.20% C-fund: - 0.67% S-fund: - 1.21% I-fund: - 0.58%

The S&P 500 is facing some short-term resistance at the 50-day EMA and the recent descending trend line (blue), but some possible longer term support at the 200-day EMA and what could be the bottom of a long term rising parallel trading channel (red).


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

The indicators still look OK, and we know that sentiment is bearish enough to fuel a rally, but the market can't seem to get past the headlines and perhaps one more push lower may be all we need for a capitulation-type buying opportunity. But until then things look shaky.

I just noticed that the broader market index NYSE Composite has already moved into bear market territory when the 50-day EMA fell below the 200-day EMA earlier this month. This is not a market leader, but it shows that the stocks in general may be doing a little worse than the bigger indices (Dow and S&P) might be telling us.


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

The Russell 2000 (small cap index) is also getting close the "death cross" with the 50-day EMA now less than 3-points above the 200-day EMA.


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

The small caps also failed at the attempted move back above the 20-day EMA. That's not a very healthy looking chart.

We are not getting very good signs from the charts, which makes caution seem reasonable here, but the indicators, sentiment, and possible support for the S&P 500 are keeping me from getting completely bearish at this point. But it won't take too much more to sway me.

Thanks for reading! We'll see you tomorrow.

Tom Crowley


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