TSP Talk Blog

Stocks opened on the downside on Friday, but that pre-holiday positive bias won out in the end and we saw green in all of the stock funds. The Dow gained 19-point but the broader indices saw larger gains percentage-wise, with small caps leading the way.

Daily TSP Funds Return More returns

The I-fund gained 0.10% and the charts of the European markets are sure getting interesting. We'll talk about that below. Bonds and the F-fund were basically flat on Friday.

Here are the final returns for the month of August, and the annual returns through August 29.



And here are the AutoTracker member's returns for the month: August AutoTracker

The SPY (S&P 500 / C-fund) has been doing well and was toying with new highs all last week, but it struggled to get above the red resistance line with any authority. This could be a sign of fatigue, or it could be that volume was too light for a breakout or breakdown. Perhaps once the money managers return from their vacations, we'll see more conviction one way or the other.


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

The Wilshire 4500 (S-fund) saw a small dip on Wednesday and Thursday last week, but still ended the week with a gain over 1%. It remains in its tight short-term rising trading channel, and looks like it may want to test the July highs. Whether it can breakout or not is questionable, but a test of the July high would be about a 1% gain from the current level.


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

The Russell 2000 (small caps) is also in a tight rising trading channel, and about 40-points from a new high and that double top from back June. The good new is, when it bottomed in early August it made a higher low within that large trading channel between about 1080 and 1210.


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

The Nasdaq starts this week at a new 52-week high after breaking above the large rising wedge pattern last week. That sounds like good news, but we'll want to see if that holds this week otherwise it could have just been a very light volume "fake-out" instead of a confirmed breakout.


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

The EFA (I-fund) fell back below the 50-day EMA after briefly moving above it earlier in the week, and the short-term rising trading channel broke down. There is a small gap open up near 67.0 that may look to get filled this week.


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

The three largest economies in Europe are showing some interesting patterns where we will either see a resumption of the downside, or we saw them put in some major bottoms.

The French CAC 40 broke down badly this summer and we even saw the 50-day EMA fall below the 200-day EMA last week, which is considered the "death cross". But since then the index moved above both of those moving averages and above the descending resistance line. The recent action has taken a lot of the sting out a very bearish looking chart.


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

The London FTSE has rallied strongly from the August low but remains is a downtrend until it can get above that larger resistance line. It did break above a weaker resistance line last week.


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

The German DAX has had a nice run since bottoming in early August, but there is a lot resistance in its current area, and that may take some work. This looks like it could be a make or break week for the DAX.


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

The IEF (Bonds / F-fund) was closing at recent [closing] highs late last week and the cup and handle breakout in early August is still acting as bullish cup and handles should. Yields have remained stubbornly low as it seems bond traders are preferring the safety of bonds while tensions in the geopolitical environment remain high.


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


Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and its TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php

Administrative Note: We're starting the 2014 "Last Man Standing" NFL football pool for the NFL. It's real easy and it's free. The deadline to sign up is Sept. 7. For more info see TSP Talk NFL Pool.

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

Tom Crowley


Posted daily at TSP Talk Market Commentary

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.