TSP Talk Blog

Stocks opened tentatively on Monday but by 11 AM ET the indices bottomed and the bulls took over. The close was not all that impressive and volume was light, but we still saw modest to strong gains in many indices. The Dow gained 26-points and the small caps are finally showing some life.

Daily TSP Funds Return More returns

The dollar rallied to fill an overhead open gap and that led the I-fund lagging on Monday. Bonds had a bad day as the AGG bond ETF also filled an open gap, which was on the down side.

The SPY (S&P500 / C-fund) broke out to new highs with a little more conviction on Monday, although volume wasn't all that impressive meaning the big money may not have been involved. But new highs should get the attention of those on the sidelines and we could see more buying from those worried about missing out.


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

We are seeing a very classic breakout from a cup and handle formation of the S&P 500. Again, we'd prefer to see volume pick up on these kind of breakouts, but we know where our failure point is (below the 211-212 area.) Breakouts from C&H formations tend to rally a while, pullback to test the old resistance, then take off again if that old resistance holds as support. That's the textbook response. Let's see what happens.


The Wilshire 4500 (S-fund) had a nice day and it looks like the bear flag we were worried about is not going to be an issue. Next stop - prior highs? The S-fund led the way but is that just a temporary reaction to a one-day rally in the dollar?


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

The Dow Transportation Index also had a nice day and it close to testing the descending resistance line and the 50-day EMA. That's a big test.


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

The EFA (EAFE index / I-fund) was down after the dollar rallied strongly. It is sitting just atop the wedge's resistance line.


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

The dollar was up big as it filled the recently opened gap (blue.) There are a couple of other open gaps overhead (red), but the dollar is still in a brutal downtrend and may not have enough strength to get to those gaps right away.


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

The AGG (bonds / F-fund) pulled back yesterday and filled the gap opened on Friday. Now the two recent gaps have been filled so we'll see where bonds AGG want to go now without worrying about gaps. That open gap up near 111.00 will get filled some day, but it has been long enough ago that it isn't an immediate concern.


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 www.tsptalk.com/comments.php

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.