Week ending September 3rd, 2010

I guess we should all be jumping up and down and dancing in the streets because of the quick snap the market made this week, but not so fast. Taking a look at the S&P 500 on the daily chart and you will see that we are still caught in a range. The weekly has now created a wedge, so let’s look at the charts below. Weekly on left and Daily on right.

The Weekly S&P has some really good positives to make us want to jump in an play, but you might be jumping the gun. The 50 week ma is straddled by the price bar, that would make me pause. The trend is still in a downtrend, so that would make me pause. Then we have that wedge forming and it is forming almost on top of that major support point. Which way will it break, Up or down? I think I will watch this one for a bit more.

The positives is of course this week pop or bounce off $1044.50. We have bounced off this point 4 times on this weekly chart and the starting point for the support point dates back to the week of February 2nd. It seems every time we are about to fall through the bulls come to the rescue. The last positive is the RSI is peeking above 50 again, but it has done this 3 times since May. So even though I missed most of this push this week, I still believe we are in a wait an see mode.

 

Small Cap of all the funds is on the brink of busting out and we probably made a mistake bailing on this fund. On the weekly you will see the price bar is sitting on top the 50 week ma and peeking through a wedge. The RSI is also peeking above 50. The daily chart is almost identical to the weekly. I would not be surprised to get a go signal soon on the Small Cap.

The I – Fund, EFA, or European fund is in about the same shape as the S&P. The weekly trading bar is straddling the 50 week ma and we also have a wedge that will have to be broken soon. The RSI is peeking through 50, but doesn’t look convincing. The daily chart is pretty much a mess and finding a trend is almost impossible. The only thing that is really nice here though is the break out in price and the RSI. There is a lot of work that needs to be done here for me to jump back in.

So the conclusion for this week is we wait and see. The Small cap is the closet of all funds looking positive, but that to just needs to be watched. Last we I said I was bailing to the F-fund, but I was not able to do that so I’ currently sitting in T-bills.

TSP distribution: G-fund 100%