TSP Talk Blog

It's been a heck of a start to 2015 as we have seen wild swings in both directions, and yesterday's (Thursday) swing was up. The Dow gained 225-points, and these triple digit moves seem commonplace these days. Of course a triple digit move in the Dow isn't what it used to be since at 17,000 plus, it takes 170-points to move the Dow 1%.

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The late rally in the U.S. kept the I-fund behind at least temporarily, and the F-fund dipped 0.13%.

The afternoon push higher was triggered by some words from the Fed about the economy and keeping rates low. It seems investors are hanging on every word, economic data, and earnings report to try to help them figure out which way this thing is going to go. The indices have been in a trading range and everyone wants to be on the right side of the breakout / breakdown.

The SPY (S&P 500 / C-fund) opened lower on Thursday but reversed strongly to the upside, which tends to lead to at least some short-term follow-through in the upside direction. But this market can turn on a dime as we've seen so it's difficult to get comfortable with any position.

The rally yesterday did produce the positive kangaroo tail reversal but the rounded top is still intact, as is the overhead resistance. This may be a case of getting a bucket of popcorn, sitting back, and watching the action to see how it turns out. It looks like it could go either way.


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

The trading range between the two red lines below are the short-term dead support and resistance lines and investors are eager to find out who wins this battle. They want to be on the right side. I was a little surprised that support held Thursday since we had the lower high so I assumed we'd see a lower low and possible a test of the 200-day EMA, but the buyers stepped up before that could happen.


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

The Wilshire 4500 (S-fund) found support at the 50-day EMA before reversing upward. There's rising support and the resistance is still overhead after two failed breakouts.


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

The Nasdaq 100 (QQQ) was up 1% and the gap that was created on Wednesday is still open. There's over head resistance in the form of the 50-day EMA and the short-term descending trendline. Tough call here.


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

The Dow Transportation Index is also testing short-term overhead resistance and finding support at the longer term rising trendline. Something's got to give.


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

The EFA (EAFE Index / I-fund) has been on fire but it really needs to break above resistance and the 200-day EA before I can get bullish on it.


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

Monday is trading day #1 in February and the month has a fair record during the first couple of days, but overall it is historically one of the weaker months of the year for stocks.


Chart provided courtesy of www.sentimentrader.com

The AGG (Bonds / F-fund) pulled back slightly from the big rally on Wednesday.


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


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Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

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