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| Today's Commentary |
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H&S Stocks opened weakly yesterday, then rallied for the next few hours before drifting lower into the close. The Dow ended the day up about 10-points and most indices finished flat to modestly higher.  For the TSP, the C-fund gained 0.16%, the S-fund picked up 0.32%, and the I-fund slipped 0.03%. The F-fund (bonds) ticked down 0.01%. The S&P is trying to navigate its way through a longer term head & shoulders pattern (H&S), which is bearish, and a shorter-term inverse H&S, which is usually bullish. And it may be a stretch, but if you look inside the right shoulder (RS) of the inverse H&S, you can even spot a possible smaller H&S forming (bearish).  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk For the last two days the S&P has pushed its way back above the 50 and 200-day EMA's intraday, but the weaker closes pulled it back below them. The 50-day EMA is still a couple of points above the 200-day EMA, and that is an important indication as to whether we are in a bull market, or a bear market - at least as far as our TSP Talk Sentiment Survey System is concerned. Speaking of, the buy signal we got in the sentiment system for this week (last week's survey) is paying off so far as it is up 2.5% through Wednesday the week. It is now up 12.8% for 2010. The market leader, Dow Transportation Index, is also forming a possible bullish inverse H&S formation, and with it trading above the 50 and 200-day EMA, it may be a good sign for the S&P, although the volume has been so light, I think any kind of surprise economic report or news event could easily push this index around, and today we get an important jobless claims report.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk A quick update on the dollar, which I believe may provide the clues to whether stocks continue to rally, or if the downtrend will continue, shows another test of the 200-day EMA, but also a test of the upper end of the bull flag - closing basically flat. Whichever ever way the dollar breaks out of this bull flag, may be the opposite of what we see n the stock market. Dollar up - stocks down. Or dollar down - stocks up.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Things went well with my surgery on Wednesday. So well that I was able to get this daily commentary done. That's the good news. The bad news is that I am told that the "pain blocker" they gave me during the surgery will start to wear of in the next 12 to 24 hours so the worst may be ahead. I'll play it by ear for tomorrow's report. I'm also on a few pain pills so I am almost afraid to go back and reread what I wrote. By the way, thanks for all of the well wishes. I'm fine. Thanks for reading! Tom Crowley |