TSP Talk Blog

Stocks dipped again yesterday as the Dow dropped 100-points and the C, S, and I-funds lost 1%, 0.75%, and 1.3% respectively. Isn't Santa supposed to be coming to town? The strong seasonality actually begins today, so we'll give him another chance.

The S&P 500 is actually acting "normally" considering the abnormal season period. The rising wedge broke down after a fake out breakout to the upside of the descending trading channel. Normal. Once the wedge broke, it fell back into the descending trading channel. Still typical. And the upper end of the trading channel, which "should have" acted as support, is now acting as resistance. Not to mention the 50-day exponential moving average is also acting as resistance. Text book technical analysis.


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

I don't know if it is because investors are expecting a Santa Claus rally, but the put/call ratios are showing that the dumb money (CBOE and Equity put/call ratio) remains quite bullish (which is bearish for stocks) and the smart money (OEX) while more bullish than just a week or two ago, are still much less bullish than the dumb money.


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

Also, as you can see, all three 10-day moving averages are at, or very near resistance.

Perhaps Santa has some magic left in his bag, and we will get a decent rally over the holidays, but I am still waiting. As I mentioned yesterday, all it would take for me is to see a higher high made on the S&P 500 from one day to the next. Yesterday's high was 880.44. If we see a number higher by today's (Thursday) 12 noon ET deadline, I may put some of my money to work in the stock funds for Friday and next week.

The nice thing about that today, is that the market closing at 1:00 PM ET, so there will only be one hour of trading after we have to make our decision, rather than the normal four hours.

That's all for today. Despite the extra day off for government employees, I'll be back here Friday morning with a brief update. The TSP is indicating that they will be accepting transactions on Friday. Have a very Merry Christmas, and a Happy Hanukkah! Peace.