More holiday action
                         
Despite a week open after a rate hike in China, stocks were able to crawl into positive territory.  The Dow ended down 18-points, but the S&P, Nasdaq and Transports all closed slightly higher. 
                                  
For the TSP, the C-fund added 0.06%, the S-fund gained 0.23%, the I-fund lost 0.19%, and the F-fund (bonds) was up 0.17%.  

The S&P 500 inched higher keeping the recent tight ascending trend intact.  Volume has dried up as expected, as the typical holiday action continued.

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

The market leader Dow Transportation Index has been consolidating for over 3-weeks now.  It seems to be having a problem closing above 5100.  This is either a sign of fatigue, or a pause to regain energy for another leg higher.  This is an important development as the direction of this break could determine if the rally in the S&P 500 continues or if a correction / pullback is headed our way.
                        
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The rest of this is basically a repeat of what we have been saying;  Strong seasonality and positive momentum are up against overly bullish sentiment and stretched market indices.
                               
                                Chart provided courtesy of www.sentimentrader.com

Here is a chart I have been keeping of the final 2 trading days of the year, plus the first 3 of the new year.  As you can see, over the last 14 years we have had some big positive gains during that 5-day period, and some big negative declines as well, so the volatility is certainly present, but overall the odds do favor the bulls as 9 of the last 14 five day periods, ended with gains.

SentimenTrader.com took it further, as they normally do, and broke down the data based on only the trading days between Christmas and New Year's during a strong market year, and a recent rally into Christmas...

[The follow chart] shows how the S&P 500 fared from Christmas through year-end when it had been up at least 10% over the past year and at least 3% over the past month.

                             
                              Chart provided courtesy of www.sentimentrader.com

Only 1 negative week out of 12 since 1951 under similar circumstances, and the gains were only modest; just like what we have been seeing over the last week or so. 

Now, what happens after New Year's weekend is another story.

Thanks for reading!  We'll see you tomorrow.

Tom Crowley

Administrative Note:  One of our long time forum members, Intrepid_Trader, will be starting a new Premium Service here on TSP Talk.  Intrepid developed his own trading system and has had very good success over the years trading his TSP account, and IRA accounts, and has been consistently near the top of our AutoTracker. 

We are offering a free trial to the service for the next several weeks.  You just need to create a login and password in the premium services area (if you don't already have one.)  No payment information is needed.  Just create an account.  Sign in, and you will have immediate access to Interpid Trader's Investment Strategies Reports. 

The reports will be available by 10:30 AM ET each morning, but his active system signals are not always known until 11:00 AM to 11:30 AM ET, so could see multiple updates on some mornings.  Because of this, you may want to either get into the habit of checking the reports each morning after 11:30 AM ET, and/or sign up for the Intrepid trader email alerts. 

We will send the emails, but unfortunately we can not guarantee that you will receive them timely as not all mail servers are created equally - especially your work servers, which are likely putting the emails through several filters.