TSP Talk - Thrift Savings Plan Strategies

Market Comments

July 21, 2010

Current TSP Share Prices

Today's Commentary

Back to resistance

After a very slow start on Tuesday, stocks rallied the entire day closing near their highs, and right up to the resistance area we have been watching. The Dow gained 76-points.


For the TSP funds, the C-fund gained 1.15%, the S-fund rallied 1.67%, and the I-fund added 0.38%. The F-fund (bonds) added 0.11%.

The S&P 500 produced a positive outside day yesterday, but it is right back up against resistance. We still have the index below the 200-day EMA and the 50 below the 200, so I would expect a bearish outcome, but one or two more positive days and we could break out above resistance, and everything could change.

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

The NYSE bounced off of the neutral level and is back on the overbought side. A weak market would pull back from here. A strong one will continue higher.

                        Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar has been able to hold above the 200-day EMA so far and put in a positive outside day itself yesterday. As we mentioned the other day, the inverse decoupling of the dollar and stocks may be happening as both were up yesterday. For the last several months they seemed to move in opposite directions. But the dollar's strength did affect the I-fund as it lagged behind the C and S-funds.



So, we've had a two-day rally in what we are now calling a bear market (50 below the 200 EMA.) The rules say you sell two to three day rallies in a bear market.

We appear to be at a pivot point and we could have our answer in the next few days. As I keep saying, the market is going to do whatever it can to get the most people leaning the wrong way. Last week's late sell-off got a lot of folks leaning on the sell side, and so far this week it is mocking them. I am not getting a good feel for what investors are thinking now - after a solid two day rally. I would think a pullback from resistance again will get the bearish sentiment back up, and a break above resistance will crank up the bullish sentiment. Until then, I have to just sit back and watch. I am out of transfers this month, but I do still get to trade my IRA, so I do still have a dog in this fight. I just don't know which dog to root for yet.

Today is the 14th trading day in July, and for some reason the 14th and 15th days in July are historically quite negative. See chart below.

Thank you for reading! We'll see you back here tomorrow.

Tom Crowley

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