TSP Talk Blog

Stocks were lower yesterday, breaking a six day winning streak for most of the major indices. The Dow lost just 12-points but we saw much stiffer losses in some of the broader indicesincluding the Nasdaq and small caps, which remain in a downtrend. The good news is, after hours, many of the futures erased Wednesday's losses.

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Many earnings reports were released yesterday but two of the bigger releases, Apple and Facebook, reported after the close yesterday and immediately the Nasdaq 100 futures shot up over 1%.
Analysis will be a little inconsequential today since Wednesday's weak action was reversed after hours, so we'll just have to see if the bulls will seize on the positive tech reports, or if the bears use a rebound to take profits.

The SPY (S&P 500 / C-fund) posted an inside day where Wednesday's high and low were within the high and low of Tuesday's action. Not usually anything meaningful. If anything it is a continuation pattern, and since we are in a current rising short-term trend, it is leaning on the positive side.


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

The PMO indicator moved above the 10-day EMA, which is generally bullish.

On Wednesday the Nasdaq gave back much of its gains from Tuesday, stalling for a second day at the 50-day EMA. That's the bad news. The good news is it should open about 1% higher today and test that 50-day EMA again.


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

The Wilshire 4500 (S-Fund) also posted an inside day and it did remain above the 50-day EMA, after breaking above it on Tuesday. The January high seems to be the problem right now (red line) but we'll have to see if that resistance hold with the futures up sharply already.


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


Bonds perked up a bit yesterday and the TLT is reaching to make another higher high. The IEF is still stuck in the middle of its range.


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

The yield on the 30-year Treasury backed off after hitting the 20-day EMA. This looks like a yield that wants to continue lower, but why? Is the economy that bad?


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

That's not what we're hearing from the stock market, but I trust the bond market more than the stock market so this has me concerned for stocks.

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

Tom Crowley


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