TSP Talk Blog

Stocks rallied on Monday with the Dow gaining 41-points on the day. The broader indices also posted nice gains, but the I-fund lagged a bit with dollar being up and the U.S. stocks rallying after the European markets closed.

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Normally a weak day historically, the market posts decent gains on the Monday after Easter weekend. Historically, this week is fairly strong after the weak Monday, so perhaps seasonality is not playing a part in the current market's action. The big seasonality issue we face now is what I have posted yesterday - the fact that stocks historically peak in April during a mid-term election year, which we are in.

The SPY (S&P 500 / C-fund) has recovered quite a bit since the big reversal last week. It is back above the 20 and 50-day EMA's, and this looks good, but not all stock indices are looking quite this good, and some of them are market leaders.


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

The Nasdaq is one of them. The recent action has been good, but right here, right now, this looks more like a rebound in a downtrend and it has a lot of work to do before breaking out of that. It is still below the 20 and 50-day EMA's. I can't say I am not impressed with the strong rebound off of the 200-day EMA last week, but I do have my concerns here.


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

The Dow Transportation Index is leading the way on the upside again as it is just a stone's throw away from a new high. It will be interesting to see if this leader can post a new high... and hold it - which is the important part. In early April it made a new high, but that breakout failed.


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


Bonds were flat to slightly lower yesterday and the ETFs remain within their trading ranges. Not much to report here for the F-fund.


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

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

Tom Crowley


Posted daily at TSP Talk Market Commentary

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