TSP Talk – 07/14/12

Volatile activity

Last week we saw quite a shake-up in the stock market with large sell-offs mid-week, and a big rally on Friday to end the week. After all was said and done, the S&P 500 saw a minor gain for the week while we saw some losses in some of the other indices.

Here are the TSP fund returns through the week of July 9 – July 13.

The S&P 500 dropped down to support levels earlier in the week, but buyers stepped up and we saw a strong rally off of support.

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

The question is, was this a one-day fluke, or is the market finished pulling back and ready to rally?
Friday was trading day #9 for the market in July. We have talked about this all week but it just too interesting to pass it up here. Going back 51 years, the 9th trading day in July has been freakishly strong, but the week or so afterward is historically weak. This coincides with the mat of earnings season.

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

So again the question is, was Friday’s 200-point gain in the Dow a fluke based on seasonality, or can the market buck the sluggish mid-July / earnings season trend and continue to rebound off of the recent support levels?

The indicators are mixed, which doesn’t help us, as the very short (hourly) indicators are somewhat overbought. The short-term (daily) indicators are more oversold, and the intermediate term are somewhere in the middle.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.

Tom Crowley
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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