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12/04/12

Stocks opened higher yesterday but sellers quickly stepped in and took the Dow into negative territory and, closing near the lows of the day, the Dow lost nearly 60-points.

Daily TSP Funds Return
G-Fund: 0.0114%
F-fund: -0.03%
C-fund: -0.47%
S-fund: -0.27%
I-fund: 0.47%
Since Thanksgiving week, the S&P 500 has gone almost straight up with not more than two days of pullbacks. It is on the overbought side but it has managed to close above the 50-day EMA for a 4th straight day, and a bullish inverted head and shoulders pattern seems to be forming. The left shoulder may need a little more time to fully develop, but its not necessary.


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


Looking at the same chart from a more bearish viewpoint, we can see a rising wedge pattern, which tend to break downward, and that 1425-1430 area, which has acted as both support and resistance this fall, is just overhead and could pose a problem.


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


The market leading Dow Transportation Index has fallen from its recent peak and continues to remain in that mostly sideways trading range between 4850 and 5200. The 3 major exponential moving averages (20, 50, and 200-day) are being tested again, although the Trannies have easily cut through them time and time again while in the trading range.


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


The dollar is trying to do its part to help the stock market as it is in a new short-term downtrend and has a little way to go before hitting any support, unless the open gap that was just filled, acts as support.


Chart provided courtesy of www.sentimentrader.com


The first week of December has an historically positive bias but it seems the fiscal cliff has investors nervous - with good reason. But considering all that is at stake if the country goes over the cliff, the market is being pretty resilient, which you can consider to be bullish. But what happens after the first week?


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

Tom Crowley


Posted daily at TSP Talk Market Commentary

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