TSP Talk Blog

Stocks opened lower on Thursday but held the early lows and drifted slightly higher into the afternoon, ending the day with modest losses. The Dow lost 42-points and the S&P 500 lost about 3, so it wasn't as bad as it appeared it would be.

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The I-fund lagged losing 0.68% while bonds and the F-fund had another positive day.

The SPY (S&P 500 / C-fund) fell below the short-term rising trading channel, and the overhead resistance line, which was trying to hold as support.


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

The Dow pulled back from the double top it made earlier this week, but it closed off the lows and remains above the recent rising support line. Double tops can produce stiff pullbacks, or just minor dips. There was a smaller double top in June and the Dow did pullback over 200-points before resuming the rally and making new highs.


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

The Russell 2000 made a double top back in June and it fell nearly 10%, so double tops should not be ignored. Normally we see a consolidation and an eventual retest of the top so this chart is a little extreme.


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

The Wilshire 4500 (S-fund) lost about 0.3% Thursday but closed within the rising trading channel. Certainly nothing to be too concerned about, but like the other indices, it had become overbought so this 2 to 3 day chop is not unhealthy.


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

The EFA (I-fund) fell below its rising trading channel as the European markets were hit a little more than U.S. stocks on Thursday. The 50-day EMA was broken to the downside again and bear markets tend to fail at the 50-day EMA so this is a little troubling and something to watch closely.


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

Historically (50-60 years), September has been the weakest month of the year, but this 30-year September Seasonality chart shows a fairly good start with some mid-month hiccups. Nothing too concerning, except that September is even worst during mid-term elections years. Another "but"... But in the last mid-term year 2010, September did great.


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

The chart of the IEF (Bonds / F-fund) is still pointing up and bonds look good - for whatever reason.


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


Per www.tsp.gov: Some financial markets will be closed on Monday, September 1st in observance of the Labor Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (September 1st) will be processed Tuesday night (September 2nd), at Tuesday's closing share prices.

Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and its TSP and ETF Systems. 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

Administrative Note: We're starting the 2014 "Last Man Standing" NFL football pool for the NFL. It's real easy and it's free. The deadline to sign up is Sept. 7. For more info see TSP Talk NFL Pool.

Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.