TSP Talk Blog

Stocks opened lower on Monday and the buyers did not seem to want to step in front of the negative momentum, which is a change from we've seen over the last several weeks. The Dow lost just 51-points with the help of strength in the oil sector and the two big oil companies in the Dow, Exxon and Chevron. But the broader indices were hit harder with small caps lagging again pushing the S-fund down 1.5%.

Daily TSP Funds Return More returns

The I-fund held up OK, falling just 0.29%, and bonds were off slightly after opening higher making a possible negative reversal day.

We speculated that the pre-holiday action may have produced some false breakouts and now that the holiday is behind us, we did see the neckline of the inverted head and shoulder pattern on the SPY (S&P 500 / C-fund) give-way. It's not a deal breaker yet but the chart is more bearish now than it was last week. Also, the PMO indicator looks like it is about to rollover and and give a sell-signal.


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

The Wilshire 4500 (S-fund) dropped 1.52% on Monday and it is now clearly a failed breakout. The question is, will we see a right shoulder form, and if so, will it be similar in dimension to the left shoulder?


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

The Russell 2000 (small caps) also pulled back from the recent resistance line but is still trying to find support at the descending trend line off the July and September highs (blue).


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

The Dow Transportation Index has been flying high with the help of lower oil prices, but yesterday we saw a major sell-off to the tune of 2.7%. Friday's big negative reversal day played out as we might expect with the downside follow-through. Now there is some support at yesterday's lows (green) and that will be the test for today and the rest of the week.


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

The EFA (EAFE Index / I-fund) continues to hold below the 200-day EMA but it has been able to hold above the 50-day EMA for over a week now. Something has got to give.


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

The AGG (Bonds / F-fund) saw a big negative reversal day after opening up in positive territory on Monday. Will this be a lower high for the AGG, because that would be bearish for bonds going forward.


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

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.