TSP Talk Weekly Wrap Up – 6/9/2012

Stocks rallied last week with the help of some bailout optimism for Spain, but next week will be a big one for Europe and investors await potential major developments so hang on.

Here are the TSP fund returns for the week of June 4 through 8.

The S&P 500 saw some positive technical action last week as it moved above both the 200-day Simple Moving Average and the 200-day Exponential Moving Average, plus the declining trend line that looks like a break from a falling wedge pattern. All good signs, but the 50-day EMA looms above and that isn't always a friendly meeting during a weak market.

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

The NYSE overbought / oversold indicator is leaning overbought, but nothing extreme yet.

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

But during bear markets and corrections, that +500 level can be tough to crack.

We've had a nice rally and the question is, have we seen the lows of this correction or is this just an oversold rally that will run its course? Keep an eye on those moving averages. They may tell the story.

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

Tom Crowley

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