TSP Talk Blog

The bulls must have stayed home on Friday because they failed to do much dip buying at all, although we saw some key support levels tentatively holding on. The Dow lost 115-points on the day but the damage wasn't all that bad with losses in the neighborhood of 0.5% to 0.7%.

GDP was down (-0.7%), but actually slightly better than expected (-0.8%).

Daily TSP Funds Return More returns

The I-fund lagged and bonds were up.

For the month of May we saw the S-fund lead the way and the 2015 hot hand I-fund was the laggard. Both were likely a result of a sharp spike in the dollar during the second half of the month.



Here are the top 5 member's returns for the month of May on our AutoTracker. Nice job!

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The first few of days of June have an historically positive bias, although recent history has been more bumpy...


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

And, I've dwelling on this for a few days - over the last 7 years, the first trading day in June has been a big one - either big gains, big losses, or big reversals. Looking at the chart of the S&P 500 down below, today could be a make or break day as the cup and handle formation is at a crucial pivot point so the "big day" may come into play again this year. But because I have been dwelling on it, it will probably be a non-event... You know how that goes.

We get the May jobs report this coming Friday and estimates are looking for a gain of 225,000 jobs and an unemployment rate of 5.4%.

The SPY (S&P500 / C-fund) pulled back to the old resistance line of the cup and handle formation again and briefly penetrated it on Friday, but it did close back above that 211 area we are watching. It looks a little scary but it is still acting as a C&H is supposed to.


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

Here is what a textbook cup and handle formation breakout would look like.


The upside momentum in the Wilshire 4500 (S-fund) slowed down some last week but it remains above the 50-day EMA and within the longer-term rising trading channel.


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

The Dow Transportation Index broke down from its head and shoulders pattern and basically hit the initial downside target of an H&S pattern. That doesn't mean the downside is over, but there could see some short-term relief here.


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

The EFA (EAFE index / I-fund) broke below its recent rising trading channel but in the process bounced below then back above the 50-day EMA, and basically filled that large open gap (red) that we have been concerned about. Now, can it rally to fill the overhead gap (green)?


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

The dollar had rallied sharply in the last half of May but it left a few open gaps along the way. As you can see, most gaps tend to eventually get filled on this UUP chart, and it is currently trying to fill that first open red gap.


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

The AGG (bonds / F-fund) has rallied nicely off the lows after finding support near the 200-day EMA. But now this chart must deal with getting back above the 50-day EMA, which isn't always easy to do if bonds have topped. With interest rates almost certainly rising later this year (bond prices fall when yields rise), you would think that bonds would not be able to rally too much from here, unless the stock market decides to tumble.


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

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