Coolhand's Market Analysis

Originally Posted by coolhand

Friday saw a wild rally into the close, which capped a positive day overall, but depending on which fund you were exposed to you either had a good week or a not so good week as the C fund posted a solid gain, but the S fund was thrown for a hefty loss.




The good news is that the S&P is rallying hard off a successful test of support of its 50 dma. The S&P is also testing resistance at its all-time high. On the other hand, price on the DWCPF remains under its own 50 dma. Upward momentum is turning up, but it's not clear if it can be sustained; especially on the DWCPF.



Breadth advanced on Friday and is bullish.

Our TSP Talk sentiment came in neutral, so that matches the NAAIM reading in terms of sentiment. Given how much is happening around the world and its potential impact on the global markets, it's not surprising to see the bulls take a wait and see approach.

So, the picture remains mixed. We can see that small cap stocks on the whole are not particularly favored over larger cap stocks and that remains something to take in consideration when deciding on which funds to hold and how much. Rallies can be explosive and would likely favor small caps if perceived threats to the economic picture are diminished. But that remains to be seen.

I remain neutral overall, but I'm going to lean modestly bullish on the S&P 500.