TSP Talk Blog

Stocks were flat to lower leading up to Wednesday's FOMC policy statement, but investors seemed to like what they heard from the Fed and the indices exploded upward into the close. The Dow ended the day up 98-points and we saw some indices move back into new high territory.

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Bonds were up, and the I-fund did play some catch-up yesterday with its 0.91% gain despite the EAFE being up just 0.22% yesterday. The dollar being down helped as well.

The SPY (S&P 500 / C-fund) made a new closing high yesterday and the bear flag we had watched develop is now gone. There is a new rising support line (thin blue) but it is rising at an angle that should be tough to sustain. The strong support is now in the 194 area (red), where the two old resistance lines meet.


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

The Russell 2000 made a higher high, keeping the new ascending trend alive. The 1160 area is the key rising support level.


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

After backing off from the March highs earlier this month, the Wilshire 4500 (S-fund) is again testing the 1041 level. It's been quite a run since the May lows and whether the recent cup consolidation gave it enough of a pause to refuel and make new highs, remains to be seen - but it shouldn't be long before we find out.


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

The Nasdaq 100 (QQQ) did make a new high yesterday and also produced a positive outside reversal day in the process. That bodes well for early trading today, but like the small caps, there hasn't been much of a pause since since the big run off the lows in mid-May.


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

The Dow Transportation Index was the one I was most concerned about with its blatant bear flag, but support from the old resistance lines has held and the bear flag is now broken. This looks bullish and should be testing the recent highs again very soon.


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

Bonds rallied yesterday but the AGG is running into some short-term resistance. The larger rising trend broke down earlier this month and now the short-term resistance could determine if the downside is going to resume after a few weeks of mostly sideways action.


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

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

Tom Crowley


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