TSP Talk Blog

Stocks were mixed on Tuesday and they danced around quite a bit as the bulls and bears battled for position most of the day. The Dow ended the day down 31-points, about 44-points off the day's high, and 57-points above the low. The S&P 500 was basically flat losing 1-point, and the Nasdaq and small caps were up rather nicely.

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The I-fund was down slightly while bonds and the F-fund pulled back with yields moved higher.

The SPY (S&P 500 / C-fund) made another all-time intraday high yesterday, but it closed slightly lower. The key level on SPY is the 199 area where we saw it breakout above the July high.


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

The Wilshire 4500 (S-Fund) is closing in on the July highs and we know double tops can act as strong resistance, so we should find out soon enough if this is going to be a double top pullback, or a breakout as we saw in the S&P 500 and Nasdaq indices.


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

The Russell 2000 (small caps) remains in a slow and steady rising trading channel since the early August lows. It is still well below the July highs so the small caps are continuing to lag the large caps, but they are heading in the right direction for now.


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

The Nasdaq made another 52-week high and it continues to lead to the upside. This is one of the market leaders, and that should be a good sign for the S&P 500, but the Russell 2000 is also a leader and it is lagging.


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

The main market leader is the Dow Transportation Index and we could get an answer to the double top pullback or breakout question as this index broke out from a bull flag on Tuesday, and it is testing the July highs right now.


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

The IEF (Bonds / F-fund) had a bad day on Tuesday but it still remains above the important breakout level near 103.75. A large gap was left open with yesterday's decline. The stock market bulls may want to see this breakdown since falling bonds tend to mean the economy is strengthening. The stock market bears, who want stocks to go down, don't want to see bond yields rising (or bond prices falling) too quickly 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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