TSP Talk Blog

It was a rather dull holiday trading day yesterday with low volume and no bond trading. The Dow gained 21-points, but this is coming off Friday's big 168-point jobs report triggered rally, which reversed Thursday's losses.

The following TSP returns are for Friday's action as the TSP was closed on Monday in observance of Veteran's Day.

Daily TSP Funds Return G-Fund: +0.0056% F-fund: -0.57% C-fund: +1.34% S-fund: +1.53% I-fund: -0.01% More returns

There was no commentary on Monday but in the Weekly Wrap Up on Saturday I mentioned that the jobs report gave investors the best of both worlds. The number of jobs created in October was 204,000, which was more than double than what was expected. But the unemployment rate moved UP to 7.3%. Since investors know the Fed is looking for this number to move down toward 6% before they they will give up their bond buying program, a move up to 7.3% tells them that quantitative easing it not close to going away.

So, the numbers above gave investors something to be bullish about to keep a rally going, but the indicators are starting really deteriorate, and what goes up, will eventually come down - or at least pull back.

The S&P 500 (SPY) is flirting with new highs again but has had trouble pushing above the 177.50 level. It is either on the cusp of another leg higher, or a possible rollover top. I wouldn't be surprised to see a new high that quickly gets sold, just to get investors leaning the wrong way.


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

The Dow has remains in a trading channel and is now testing the higher end of the range. We often see upside breakouts from long consolidations like this, but if the trading channel resistance holds again...


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

The Nasdaq filled an open gap during last Thursday's sell-off but has since rallied off of that as support from the filled gap held. You can see that the Nasdaq hasn't exactly stayed within the parallel rising trading channel but that is the basic trend and it is within that rising channel now. There's a little more room on the downside and the short-term trend may be turning down with the recent lower high, and we'd have to see new highs to void any new downtrends from being created here.


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

The small caps show the possible new downtrend a little more clearly. The 50-day EMA held on the recent pullback and that is a bullish sign, but the new descending resistance line is being tested right now so the rest of this week's action is quite important.


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

The bond market was closed yesterday but the ETF's still trade on the stock exchanges. You can see that we've seen some breakdowns in the 20+ year chart as there is a new lower low.


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

There is an open gap on both charts that could get filled by a snap-back rally, but these charts are starting to deteriorate and any rallies in bonds / F-fund may have to be sold.

In today's TSP Talk Plus report we go over the Smart Money / Dumb Money Confidence Indicator, and an interesting Hedging Activity Indicator. 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

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

Tom Crowley


Posted daily at TSP Talk Market Commentary

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