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I wanted to revisit the put / call ratios because the mid-January rally pushed the 10-day moving averages of the CBOE and the Equity put/call ratios back up toward areas that has been trouble for stocks. Those two indicators are considered the "dumb money". You can see that the dumb money appears to be getting overly bullish again.


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

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This may sound cliché, but this should be a big week for the stock market. After Thursday and Friday's big losses, which erased the impressive gains made earlier in the week, the market appears ready to make a move. The problem is it could go either way.

We have data that could corroborates either side, the bullish or the bearish. The January jobs report will be released on Friday the 6th, and with estimates at -500K, surprises either way may put the exclamation point on a wild week. ...

The market failed to continue its winning ways yesterday as the TSP stock funds dropped 3% to 4% on the day. Bonds could not capitalize on the weak equities as the F-fund dropped 0.5%.

The S&P 500 ended a 4-day winning streak with a significant pullback that took out Wednesday's low giving the index a lower low, and a lower high. That could mean a new short-term downtrend has begun.

Volume was very light and bonds were down so that does not really confirm a sell-off, ...

Stocks continued their rebound yesterday with a scorching 3.4% gain in the S&P 500, while the small caps added an impressive 4%. The I-fund picked up 2.3%, lagging because of a gains in the dollar and probably the lag time of the overseas markets.

The rally has been quite strong, but the S&P 500 is not out of the woods. There is a pretty obvious wedge coming together, and that is typically bearish in a bear market, as they tend to break in the direction of the larger trend. ...

It was another strong day for stocks yesterday as the C and S funds were up 1.1%, and the I-fund, with the help of a dip in the dollar, was up 2.1%.

The S&P 500 is approaching the 20-day and 50-day moving averages, and the declining resistance line. With the S&P 500 now up three days in a row, can the rally continue? Perhaps. Seasonality is quite strong this week, but rallies tend to fade after 2 or 3 days in a bear market.

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