TSP Talk Blog

After the bears tried to take control at the end of last week, stocks opened higher on Monday and the bulls put their foot down and and told them, "not so fast!" The Dow gained 156-points and obviously the dip buyers are still lurking.

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The I-fund lagged badly as the dollar rallied sharply and moved near the recent highs, and bonds lost ground.

As our TSP Talk Plus subscribers have seen, I was personally getting a little cautious on the market but we don't trade on my emotions. We trade based on system signals and the system has had us in stocks since early February, despite my concerns. Monday was a good reminder.

I still have a couple more days that I will be heavily occupied and I will have to make this quick. I always try to respond to emails and questions as quickly as possible, but I won't have access to my computer much during the day over the next couple of days.

The SPY (S&P 500 / C-fund) fell out of the narrow rising trading channel and now the bottom of that channel should act as resistance, but it is still rising and the angle of incline may have just changed. This is typical action in a bull market and bull market rallies don't die easily. We could be forming a top but it won't be an easy call for the bears. The market likes to dish out the most pain possible until you capitulate. Once the bears have had enough pain, the market will top. Until then...


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

The Wilshire 4500 (S-fund) has found strong support at the old resistance line.


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

The EFA (EAFE Index / I-fund) was up slightly but the dollar was too so the I-fund paid a little price on Monday.


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

The AGG (Bonds / F-fund) fell right to the bottom of the bear flag we have been watching. Bear flags generally break down but that "fake-out" on the upside had us a little confused for a couple of days. I thought maybe the small overhead gap was going to get filled, but bonds couldn't quite get there. If I had to guess, I'd say they will break down, but we could always see another push to the top of the flag first.


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


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! We'll see you back here tomorrow.

Tom Crowley


Posted daily at TSP Talk Market Commentary

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