For the TSP on Monday, the C-fund gained 0.46%, the S-fund was up 0.98%, the I-fund added 0.03%, and the F-fund (bonds) gained 0.10%. 

Commodities were crushed last week but they put in a strong performance yesterday with the help of an afternoon sell-off in the dollar.  The dollar rallied in the early morning hours but ran into resistance at 75.1.  You will notice that stocks bottomed about the same time as the dollar peaked Monday morning. 

        

The resistance in the dollar came via the 50-day EMA.  During a bull market you want to be a buyer when you get a 2 to 3 day pullback, particularly at a point like the 50-day EMA.

The dollar is in a bear market so if it is going to continue, we would think that a 3-day rally up to the 50-day EMA would start to get sold.  That is unless the bear market is over for the dollar? 

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

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

I fell for the break down of that bear flag in April as it fooled me into selling.  Here we are again in a similar situation where a bear flag sell-off is possible this week.  The question is, will the neckline continue to hold, or could we see that open gap near 1315 get filled?

You may notice that the volume was very low yesterday compared to a typical trading day.  A rally on low volume can be suspect, and while it was a little light, there is actually a good reason why it was so much lower than other recent days. 

Citigroup, which was trading at about $4.40 a share last week, is usually one of the most highly traded stocks seeing 400 million to 500 million shares traded daily.  Well, yesterday the stock did a 1 for 10 stock split so the shares moved up in price from $4.40 to $44.00, so the volume dropped off to closer to 50 million shares.  That is why volume was down for the entire market -  about 450,000,000 fewer shares of Citigroup were traded than usual.

Oil was up sharply yesterday, along with the other commodities, and that put a little pressure on the market leading Dow Transportation Index, which was flat on a day.
 
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

So while most indices closed higher, our leader did not.  Oil is still down in the low 100's, which hasn't been a big problem for the stock market, so we'll have to see how it reacts if oil is up again today.  The chart still looks good with a lot of support underneath it.

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Thanks for reading!  We'll see you back here tomorrow!