TSP Talk Blog

Stocks were down yesterday (Thursday) but what a day it was. The Dow ended the day down 106-points, which is actually just 0.61%, but the swings we are seeing, and particularly in the overnight futures on Wednesday night / Thursday morning, were spectacular.

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The I-fund gained 1% as U.S. stocks were up when the European markets closed, and Japan had a big day prior to the big overnight sell-off. But it's paying the price today as in midday trading on Friday in Japan, the Nikkei is down about 3%. That 1% gain in the I-fund will likely disappear with today's price, unless stocks soar in the U.S., but the futures are down sharply as I write this Thursday night.

Small caps lagged and bonds continue to climb.

All of the kangaroo tail reversals we saw on the chart after Wednesday meant we should see some upside action follow-through on Thursday, and the indices did open higher with the Dow up as much as 90-points in early trading, but the bears were ready.

The SPY (S&P 500 / C-fund) was down almost 1% yesterday but it actually held above Wednesday's lows, which is where we are drawing the right shoulders support line. If that support does not hold, the 200-day EMA and the open gap are just waiting with open arms for a chance to get into the action.


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

The Wilshire 4500 (S-fund) has been in this wedge formation that can be considered a cup and handle, and normally bullish. Yesterday's action saw it close just below the rising support line and below the 50-day EMA, so that's a little concerning.


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

The EFA (EAFE Index / I-fund) is hurting and until this technical picture improves I will be avoiding this fund.


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

The German DAX however, considered one the I-fund leaders, has actually been hanging on quite well. It will likely pull back on Friday because of what happened in the U.S. stocks on Thursday, but it is flirting with breaking out to new highs. This is one to watch and if it can breakout, the -fund may start to shape up.


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

The AGG (Bonds / F-fund) was up big yesterday and the 10-Year Treasury yield was down to 1.74%. That's amazing. Stop reading this and go refinance your house!


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


Per www.tsp.gov: Some financial markets will be closed on Monday, January 19th in observance of the Martin Luther King, Jr. holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 19th) will be processed Tuesday night (January 20th), 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 the allocations of the 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

Thanks for reading! Have a great holiday 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.