TSP part 2, for week 8 2/23/2014

There is not many times when I do not have much to say about the markets, but this week there is just not much to say. The International made the best move, but when you look at the chart it only confirms that we are at highs and bouncing just below resistance. Will we break through or get rejected as soon as next week. We have a small glimmer of hope of what might be the beginning of a new move higher looking at the Small Cap. Yes, on Friday the Small Index just barely peeked through the resistance level and closed at an all time high by 70 cents. So let’s quickly look at the charts and see what we have.

The S&P 500 actually finished the 4 days of trading down a few points and is still grinding against resistance. The more times we hit resistance and fail to get through, the more likely we will get a major pullback.

 

The Small Cap Index is where we have hope that a new leg higher is about to happen. We finished the week just barely above resistance and closed at an all time high. Monday it would be really nice to see stock prices rise in order to confirm the breakout and make a much higher pivot high. I would prefer small increments as we climb but will take whatever the market dictates. What we do not want is for price to fall back below the resistance line to soon.

The International made a nice move up Tuesday last week and then trailed off the next two days. Friday it came rolling back and briefly peeked above resistance but could not hold it. So this to me is another good sign that maybe a new leg higher is about to happen.

Finally we have Bonds and it is easy to see that we are still in the bull flag. Normally we breakout to upside on the bull flags. I’m not sure that is what I want to see here because if bonds break to the upside, stocks should stall or fall. It is interesting right now we have stocks knocking at highs and seem to be waiting for a catalyst and Bonds are sliding slightly down in a bull flag wait for a verdict.

Conclusion: This one is about as simple as it gets this week. We watch! I would find it hard to believe that by next Friday that prices on our stock indexes are not breaking in one direction or the other. Yes, it is possible for them to grind for another 5 to 10 trading days, but whatever is going to happen is going to happen soon. I will not be making any changes Monday and will be watching as the rest of you will.

Monthly movers will have to make decisions at the close Friday, February 28. Looking at all the purple lines on all the 4 charts above the only thing that looks like it might need tweaking is Bonds. Bonds might actually fire a sell signal come Friday.

Hope you’re having a great weekend.