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Holiday trading
Stocks drifted modestly lower yesterday on light volume. The Dow lost
16-points while S&P 500 and Nasdaq also saw minor losses, but the small caps
and Dow Transports closed slightly higher.
For the
TSP, the C-fund lost 0.15%, the S-fund
was up 0.03%, despite the weakness in the dollar, the I-fund lost 0.26%, and the F-fund (bonds)
slipped 0.09%.
In case you haven't heard, the TSP offices are closed today (Friday) but
they will be processing transactions (interfund transfers). According to tsp.gov:
The Thrift Savings Plan will be closed on
Friday, December 31 in observance of New Year's Day. The stock and bond
markets will be open, and the TSP will process transactions. However, since
December 31 is a Federal Holiday, the TSP call centers will be closed.
The S&P 500 has been virtually flat for the last 6 trading days. It is
now hitting the lower end of the recent tight rising trading channel.
The chart looks so ready for a pullback below that support line, down to the
20-day EMA, but continued strength would not surprise me as apparently a lot
of folks are expecting a drop - at least according to this week's sentiment
survey (see below).
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
The dollar has rolled over recently and actually closed below the
50-day EMA for the first time since before Thanksgiving. It seems to
have found some support at a weak trend line so it should be interesting.
You never know what to expect during light volume trading. Many times
post-holiday action reverses pre-holiday action.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
The TSP Talk Sentiment
Survey System gave what I thought was a surprise buy signal this week.
I did not expect to see the bulls (46%) to bears (39%) ratio (1.18 to 1) to
move below the 1.26 buy level so quickly after the 3.20 to 1 ratio, and sell
signal, we saw last week.
You can see that there has been some weakness on the first trading day of a
new year, but the second day has been quite positive historically.
Chart provided courtesy of www.sentimentrader.com
Strong seasonality and positive momentum are up
against overly bullish sentiment and stretched market indices. This is
the New Year's Day holiday historical seasonality chart.
Chart provided courtesy of www.sentimentrader.com
Thanks for reading! Happy New Year!
Tom Crowley
Click here to discuss today's Market Commentary
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
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especially your work servers, which are likely putting the emails through
several filters.
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