TSP Talk Blog

Stocks rebounded on Wednesday posting modest gains and thwarting the possible three day losing streak. The Dow added 55-points, while the Nasdaq and Russell 2000 led the way with solid gains. The charts are now testing some key support levels.

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The I-fund closed down despite some gains in the EFA, so it should get some of that back with today's price. Bonds continue to struggle.

The SPY (S&P 500 / C-fund) fell below the 20-day EMA intraday for a second straight day, but it has yet to close below it. The 199 area on the SPY will be a key support level, although we could see a push below it that could try to get investors leaning the wrong was, a.k.a. a fake-out.


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

The Wilshire 4500 (S-Fund) fell below the support I talked about yesterday (red line) but it rebounded and closed back above it, and the 20-day EMA, so we are seeing some important levels of support giving way intraday, but coming back by the close.


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

The Russell 2000 hit the 50-day EMA and rebounded, then closed back above the 20-day EMA. It's in a new short-term descending trading channel so the 50-day EMA is import here if that trend is going to be broken.


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

The Dow Transportation Index fell back below the July highs temporarily, but like the other indices, it managed to climb back above the key support and close above it. The rising support line was broken yesterday and it did remain below that on Wednesday.


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

The positive reversal day on Tuesday in the EFA (EAFE Index / I-fund) followed-through with a strong day on Wednesday. It's too early to say if this will be a higher low on EFA, but it's a start. The 50-day EMA will be the next test on any further upside action.


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

The IEF (Bonds / F-fund) fell below another level of support on Wednesday as bond yields rose again. This looks bearish for bonds but there are a couple of open gaps above that may need some attention.


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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