For the TSP, the C-fund dropped 0.18%, the S-funs managed to gain 0.14%, and because of the late rally in stocks, and late sell off in the dollar, the I-funds did not rebound like the U.S. funds; closing down 0.97%, but should recoup some of that in Friday's share prices.  The F-fund gained 0.18%.         
       

The early losses were certainly alarming as the S&P 500 traded well below the 20 and 50-day EMA's, but the late rally took the index back above those important levels and it is in a much better position now.  The bull flag is intact, and that is normally a bullish formation.
                                     
                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

On Tuesday we talked about the comparison between the current market formation, and that of early 2007.  Yesterday's sell-off and late reversal actually strengthened that comparison as we saw very similar action in late March of 2007.

You can easily see in the charts below, the similar rebounds off of the 200-day EMA, and the turning points on each chart marked A thru F, but even more remarkable is the similar type of day we had yesterday compared to the "F" day in the 2007 chart.

You can see that there was a sharp decline on that day in 2007, but it closed above the 20 and 50-day EMA's, just like yesterday. 

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

If the comparison continues, tomorrow could see some sideways to slightly positive action, followed by a sharp rally on Monday. 

As I have said many times, the problem with finding these types of patterns is that they tend to end almost as soon as you discover them.  Hopefully we'll get at least a few more similar days before that happens.  Also, please understand that we are talking about a short-term market action here.  Once the pattern breaks, we're done and we'll re-evaluate the complete situation. 

Our leader, the Dow Transportation Index, closed up 0.4% yesterday, and the chart (like most indices) a nice long kangaroo tail, just like we saw at the reversal bottom earlier this month.  They tend to produce some follow through in the direction of the reversal.
                      
                      
                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Bond yields moved lower yesterday (bond prices higher) as investors opted for some safety after the continued issues with Greece's economy were reported.  The 10-year T-Note's yield has now pulled back to an area of support.  This is critical for the F-fund as if the support is not broken, bond prices are likely to continue to fall, and we could have a new down trend for bonds and the F-fund.

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

I posted the March seasonality chart below.  It is a little more favorable than February's chart, but despite February's negative seasonal bias, it has done pretty well so far.  With one day to go, the C and S funds are up 3% and 4.9% respectively, while the I-fund is down 0.9% as the strength in the dollar gave it some trouble.

The TSP Talk Sentiment Survey System remain on a buy signal after the 1.18 bulls (46%) to bears (39%) ratio.  After an underperforming year in 2009, the system has a higher return than all of the TSP funds in 2010.  

Thanks for reading.  Have a great weekend!

Tom Crowley