TSP Talk Blog

Stocks floundered during the first half of the day, but buyers showed up in afternoon trading and we saw a decent relief rally. The Dow gained 76-points and the S&P 500 and the small cap fund gained about 0.7% each.

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Bonds were up slightly and the I-fund lagged as all of the gains in the U.S. indices came after the foreign markets had already closed. Look for a little bounce-back in the I-fund today.

The SPY (S&P 500 / C-fund) saw a decent positive reversal day but it is still trading below the 50-day EMA, and that makes two closes below the psychologically important moving average. The bulls are looking for a push up to at least fill the small open gap near 196, while the bears are hoping the 50-day EMA acts as resistance.


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

The Russell 2000 is in a similar situation, but it is dealing with the 200-day EMA and not the 50-day EMA, which makes it a lot more urgent. The downtrend is holding so the small caps need some help Another positive day and close above the 200-day EMA would go a long way.


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

The Wilshire 4500 (S-fund) is somewhere between the two charts above having already fallen below the 50-day EMA, but still above the 200-day EMA. The 20-day EMA is probably going to cross below the 50-day EMA unless we get another decent up day today. That's a warning sign, but also a sign of being oversold and due for some relief as we saw on Monday.


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

Bonds were mostly flat yesterday after another attempted breakout from the trading channel. It seems to be trending higher and holding above the rising 50-day EMA, but that resistance is going to have to break to see the F-fund rise from here.


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


Posted daily at TSP Talk Market Commentary

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