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| Today's Commentary (Short Term Outlook) |
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Relentless Stocks rallied yet again yesterday, as the market continues to make it tough for those in cash to buy in at a decent level. The Dow added 103-points and we are seeing new 52-week highs on most indices. There was a lot of green for the TSP funds. The C-fund was up 0.73%, the S-fund rallied 0.97%, the I-fund gained 0.50%, and even bonds eked out a small gain at +0.01%. The S&P 500 made a new high before testing any of the support below. It's a little tough to see in the chart, but the recent pullback bottomed 5-points above that 1150 support line, which was the high in January. This makes it so tough to try to jump into the market. That's what cash on the sidelines will do. The dip buyers are stepping in; not giving technical analysts the ideal buying setups, and so they wait with their cash on the sidelines, and it becomes a vicious cycle. The support lines on the chart below are simply showing similar breakouts to new highs and how the market reacted afterword. Some breakout gave us decent rallies, and some ran out off steam soon after the breakout.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I have to make this quick today, but I will add that we are not seeing indicators like the overbought / oversold indicator, getting too overbought. It is in overbought territory, but it's not extreme.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Overbought / oversold indicators actually work betting in oscillating markets (trading ranges) whereas the MACD indicator is a better indicator for trending markets, which we are in now. Currently the MACD is giving us a negative divergence and this could be a sign of a tired market.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk But the market seems to want to rally on good, bad or indifferent news so I hope those who are in stocks now are enjoying the ride. The chart above may be trying to tell you that it may be time to possibly sock some of those gains away for a rainy day, but for buy and holders, this is your time to shine. Enjoy it while you can. Thanks for reading. We'll see you back here tomorrow. Tom Crowley |