TSP Talk Blog

Stocks opened lower and closed lower yesterday, but made some midday attempts to push higher. The Dow lost 102-points on the day, which may get most of the attention, but the S&P 500 and small caps saw relatively small losses, while the Nasdaq 100 was flat and actually made a new intraday 52-week high.

I am still out of town without my usual setup but should be back in the office on Thursday night - maybe early Friday. Again, thanks for you patience if the commentaries are brief or if you've had to wait a little longer for me to respond to any issues. Thanks.

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The Dow losing 102-points will have a negative impact on investor's sentiment, but let's not forget that a 100-point loss in the Dow at its current levels, is just a 0.6% decline.

The SPY (S&P 500 / C-fund) is still above the resistance line of the rising wedge pattern, and that may now act as support during a pullback. Rising wedges don't normally break to the upside, but we've had 5 closes above that old resistance line and that is some confirmation that it is not a "fake out." Of course there's an open gap still within the wedge, and we know that could be an eventual downside target for the SPY.


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

The Nasdaq 100 (QQQ) actually made a new intraday high yesterday and that may not have been as noticed by investors as the triple digit decline in the Dow. The short-term rising support line is being tested now, but I don't know how long this extreme angle of incline can sustain itself.


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

The small caps of the Russell 2000 closed well yesterday but the index has pulled back from its recent high and the question is, will this become another bull flag that breaks to the upside again, or will the gap get filled and a more meaningful pullback ensue? The 20-day EMA recently crossed back above the 50-day EMA, which is a bullish sign for the index, but it can also be a sign of being short-term overbought.


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

I have been posting the chart of the AGG for bonds lately, but going back to the TLT and IEF charts shows the two bond ETFs are trying to find support at the 50-day EMA after breaking their rising support lines.


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

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U.S. Open Golf Contest in the Forum - Deadline is 10 AM ET Thursday.

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

Tom Crowley


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