What a day Friday was for the markets. Today’s move in the market basically wiped out all the down days for the last 5 trading days and put us back to even. So the chart above would have been really ugly without it.
Above we have the S&P and Small Cap and they look almost identical. What I want to show you is even though this Summer so far has been somewhat gut wrenching, it is making progress. After Friday’s close both indexes made a higher lower pivot. These show support and they show a pattern of stepping stones uphill and that is what we want to see. If these patterns are to continue, then both the S&P 500 and Small Cap will have to take out there last pivot high’s that I marked on each chart. Number wise, that means that the S&P500 has to close above $1374 before turning down again and the Small Cap must close above $698. My only concern here looking at my daily charts are the 50 day moving averages are still going down slightly, even though we have a positive cross. As of Friday, price once again closed above the 50 day ma and that is a good sign. Problem is, this is the second time in recently that we have crossed over and last time it did not hold. We need to hold above the 50 day and run.
Conclusion: It’s Summer time, we just entered earning season, so things can once again go in either direction quickly at this point in time. We seem to be cruising at levels where neither Bulls or Bears want to control the market. Based solely on my charts, I think we are leaning to the Bull side, so I will stand my ground and ride with my current setup. As bad as last few days were, I only gave back .2% gains which was pretty amazing. I actually though it was going to be much worse. If your our looking in, after Friday’s close, Monday would be a good entry point as long as the day is flat or going up. Anything more than 1/2% pullback means a no go.
TSP Distribution: C-fund 50%, S-fund 40%, G-fund 10%
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