TSP Talk Blog

9/13/12

Stocks hung in there another day waiting for today's Fed policy announcement. The Dow gained 10-points and most major stock indices closed slightly higher.

Daily TSP Funds Return G-Fund: 0.0036% F-fund: -0.20% C-fund: 0.24% S-fund: 0.43% I-fund: 0.67% More returns

Which way will the Fed send this chart? A breakout or a move to the bottom of the channel? It's a nice looking chart but the path of least resistance may be another pullback to the 20-day EMA. Of course the Fed can change all of that with 3 words. "QE3 is on."


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

The Dow Transportation Index remains in the triangle formation. It gave us the "fake-out" earlier this month. Typical action after a fake-out is a breakout in the opposite direction. Can the Transports do the typical and break above the triangle's descending resistance?


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

To follow up on the Nasdaq 100, the large cap tech stocks index, it made a lower low yesterday, but found support at the 20-day EMA, and recovered nicely. It's a possible reversal day, but again, the Fed will determine that.


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

The OEX put / call ratio (the smart money) may not think so, but this indicator, which I used to use religiously, has been a little inconsistent lately. I do think the smart money is bracing for any possible bad news by protecting their stock positions with put options, which would make money if stocks fall. Whether that bad news comes or not, we don't know. But they are ready.


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

The dollar continues its slide, which has been helping stocks remain buoyant.


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

A declining dollar helps stocks for the most part, but commodities are the real benefactor. Oil is picking up steam again, and have you seen the price of gold lately? Here's a look at the CRB Index, which is a commodities index...


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

The Fed normally announces the policy statement around 2:15 PM ET but there could be tidbits leaked beforehand as the meeting winds down. The next couple of days could be wild, but it's tough to predict what will happen.

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

Tom Crowley


Posted daily at TSP Talk Market Commentary

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