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Bullish action, but of course, some concerns

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by , 09-10-2013 at 09:06 PM (2916 Views)
09/11/13

Another big day for stocks yesterday after some positive economic data out of China, and the prospect of no air strikes in Syria helped put investors in the buying mood while the bears basically stayed on the sidelines. The Dow gained another 128-points, on top on Monday's 140, making the normally weak September, look pretty good.

Daily TSP Funds Return
G-Fund: +0.0063%
F-fund: -0.27%
C-fund: +0.74%
S-fund: +0.91%
I-fund: +1.16%
The S&P 500 (SPY) filled its open gap (green) but just to make things more interesting, opened another small gap below (red). The descending resistance was broken on Monday and the follow through on Tuesday is a bullish sign. Volume wasn't all that great so there is still some uncertainty out there. Whether it's the big money or the dumb money that's holding back, I don't know.


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


The Transports put together another huge day with a 2% gain yesterday. The July high is being tested now, but the early August high is within reach. The open gap was filled on Monday (green), but Tuesday's gap up left an open gap on the downside (red).


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

I normally look at the 10-day moving average of the ARMS Index (TRIN) but it wasn't telling me too much yesterday. What I did find was the 4-day moving average hit a level not seen in over a year.


Bonds and the F-fund fell yesterday as the downward trend continues. Yields moved modestly higher but the 10-year yield has still not broken 3%. If this trend continues however, 3% may not be too far off, but bonds are so oversold it's hard to get too bearish on them at this point.


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

As I write this the president is about to start his address to the American people on Syria. I was surprised that stocks held up so well after the convoluted news came out yesterday where Russia intervened with a proposal. I'm curious how President Obama will address this, and how the market will react.

The charts are starting to look so good that I am running out of reasons to be out of the market. That may be reason enough, if you follow the contrarian reasoning that the sentiment survey uses. The Fed's FOMC meeting is next week and I'd hate to make any big bets in front of it so I guess I'm stuck on the sidelines until then.


In today's TSP Talk Plus report we'll go over a bunch of indicators including the ARMS Index, which is at a level not seen in a long time, the smart and dumb money put / call ratios, a longer-term view of the S&P, plus a couple more charts including a look at the I-fund. Don't miss it!

For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php

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

Tom Crowley


Posted daily at TSP Talk Market Commentary

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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