Cracks
                         
Stocks opened higher yesterday, but the trend of weaker closes continued as the Dow ended the day down 19-points, but the broader indices saw a little stepper losses.

                                  
For the TSP, the C-fund lost 0.51% yesterday, the S-fund dropped 0.54%, the I-fund fell 1.62% with the dollar moving sharply higher, and the F-fund (bonds) lost another 0.26%.  

The S&P 500 slipped from its recent clingy relationship with that middle trend line.  This chart is the market's strongest bullish argument - the 3 1/2 month rising trend.  The trend is your friend, don't fight the trend, etc., you've heard them all, and there's a reason for them.  Trends can last longer than seems reasonable.  But I am seeing more and more evidence that is trying to pull me from the bullish side and into the bearish side, and I don't know which is going to win yet.
                      
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Do you remember the Hindenburg Omen signals we got back in August?  In August I kind of dismissed the signal because if you remember, it was becoming mainstream as it was headline news in several publications, and even Glenn Beck was talking about, etc.  I just had a pretty good feeling that because everyone knew we were getting a Hindenberg Omen and they thought we were going to be seeing a market crash, that it wasn't going to happen - and it didn't.

Well, we got a couple of new signals this week, and no one seems to be mentioning it.  That scares me a little.  However, with the Fed pumping money into the system like it is, it makes any chances of a prolonged decline, never mind a market crash, less likely.  But the "Omen" is out there, and I thought you might want to know.

The dollar was on fire yesterday.  We saw a 1% rally which really put pressure on stocks, and you saw what happened to the I-fund.  The dollar never fails to disappoint me - it seem to consistently move in the opposite direction of where I think it is going. 

It is now pushing the 200-day EMA again after moving above the resistance level I drew yesterday.  Tuesday's reversal did kind of set up yesterday's strength, but where it goes the rest of the week - I have no idea.  I still think it looks bearish, but there's no doubt that the weakness in Europe is keeping a bid underneath the dollar.

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

This is a duplicate of the chart I posted yesterday.  It's another indicator that is trying to tell me to move aside and let this market correct.  But it is not an instant gratification indicator, so it's possible the uptrend lasts a little longer, but do we want to take that chance?
                                
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk      

We know the TSP Talk Sentiment Survey System came within a few votes of giving us a sell signal last week (for this week).  Then there's the SentimenTrader.com's Confidence Indicator which is screaming for us to be wary of the dumb money's excessive bullishness.

                                 
                                   Chart provided courtesy of www.sentimentrader.com

But we're heading right into the strongest seasonal period of the year - although the week before Christmas is historically (during the 55 years between 1950 and 2004) not that great.  That is except for the last day before Christmas, which is Thursday 12/23 this year.


                                 Chart provided courtesy of www.sentimentrader.com

So the cracks are there and this is not an easy call with the trend still moving up.

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