TSP Talk Blog

Stocks rallied on Monday, erasing much of the Friday sell off as the Dow gained 209-points. Friday was an options expiration day and there seemed to be a lot of emotional selling, and yesterday's bounce back seems typical in a bull market when the selling is overdone. But there are some warning signs out there so we really need to see new highs soon or the bears will look to take control again.

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The I-fund lagged as the dollar rallied, and bonds fell rather sharply on the day.

The S&P 500 (C-fund) filled the big gap left open after Friday's sell off. New highs are a stone's throw away, but are investors willing to continue to buy up at these levels? They have given up a few times this year when the SPY hit 211.


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

The Wilshire 4500 (S-fund) bounced back after hitting the rising support line. It looks like it wants to resume its bull market ways, but it really needs to make a new high or the bears will jump on the small caps.


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

The Dow Transportation Index has bounced off of some key support (near 8600) as well as the 200-day EMA and has held so far. It even made a higher high over the prior two peaks, but the 50-day EMA may give it some trouble, and look at the size of that bear flag. It's close to do or die for the Trannies.


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

The EFA (EAFE Index / I-fund) was up but lagged on Monday as the dollar rallied about 0.6%. The rising wedge is a concern so like the other indices, seeing new highs fairly soon is important.


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

The AGG (Bonds / F-fund) was down but remained above short-term support. The trading channel is rising but there is also overhead resistance.


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 www.tsptalk.com/comments.php


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