TSP Talk Blog

Stocks resumed the rally on Tuesday, after a day of pausing. The Dow was the leader gaining 221-point, but Visa, up 10.5%, accounted for over 150 of those points, and that's why some of the other indices didn't do quite as well as the Dow, but the gains were still solid. The exception was the Dow Transportation Index, which was down 1%.

Daily TSP Funds Return More returns

The TSP stocks funds gained between 0.3% to 0.6%. Not quite what 221-point day in the Dow would suggest, but still good. Bonds also saw a modest gain.hat could allow us to perhaps buy a little cheaper.

The SPY (S&P 500 / C-fund) has nearly regained all of the losses we saw from the September 19 high, through October the 15 low. The all-time highest close was on September 18, which happened to be the Thursday after the September FOMC meeting. The lower low we saw makes it possible that we are seeing the head of an inverted head and shoulders pattern forming, in which case the blue neckline could be an upside target and perhaps strong resistance.


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

Inverted / inverse head and shoulders patterns are actually very bullish in a bull market, but if the the right shoulder forms, it would give stocks modest pullback.



The Wilshire 4500 (S-fund) was up 0.53% on Thursday and if it is also creating an inverted head and shoulders pattern, it has a long way to go to hit the neckline, so once again the small caps are lagging.


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

While the neckline in the SPY is rising, and the Wilshire's is flat to slightly declining, the resistance line and possible neckline of an inverted H&S on the Russell 2000 (small caps) is declining rapidly. So much so that it is testing it now.


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

The Dow Transportation Index, which is the market leader, made a new all-time high this week, but has backed off over the last two days - possibly creating a failed breakout. It did close off the lows creating a possible positive reversal day, but that breakout point near 8700 is the area to watch for resistance.


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

The EFA (EAFE Index / I-fund) was up yesterday and the rebound has been strong, but there is some solid resistance in the 63.60 area.


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

The AGG (Bonds / F-fund) posted a minor gain but remains in a descending trading channel. There is some support in the 109.60 - 109-70 area.


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


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Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

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