TSP Talk Blog

Stocks opened higher on Thursday, and just kept going. The Dow gained 180-points and 1% or higher gains were picked up by most major indices.

I didn't see any major catalyst except for possibly a Fed hangover. A weaker than expected CPI and a stronger than expected weekly jobless claims should not have done this, but that's about when the rally started. The Fed's job these days seems to be to keep the stock market from falling. That's good for those invested, but how much of that is reality?

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When I checked the futures about 2 hours before the market opened on Thursday, not only were they down, but the European markets were also a sea of red. They reversed higher in sympathy with the strong US. open and the I-fund ended with a 0.42% gain. It will be interesting to see if the European markets resume the upside on Friday as you might expect, or if the situation in Greece will keep them from getting as excited as the U.S. indices. Bonds were down.

The SPY (S&P500 / C-fund) blasted through the descending resistance line as is reaching toward new highs. It is solidly above the key moving averages and the up, down up pattern we have seen for months seem to be continuing.


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

The Dow Completion Index (S-fund) made a new 52-week high after lagging the S&P 500 for quite some time. It's not perfect but it looks like a cup and handle formation breakout.


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

The Dow Transportation Index had a big day and made some progress, but it is still mired in that head and shoulder breakdown and one up day doesn't take away the weeks of technical damage.


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

The Nasdaq Composite also made a new all-time high and it looks like a bull market continuing. The question we have going forward is whether this new 52-week high is going to be a blast off like the February breakout, or if it will be a temporary move that will retrace and fail like back in March and April / May?


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

The EFA (EAFE index / I-fund) broke through its descending resistance and ended with strong gains. It did close below the 50-day EMA and of course all eyes are on the European markets and the situation in Greece which could turn this back around. Every other episode of this Greek crisis was averted so why should we believe this one will be different? The only difference this time is that they've actually come up with the term "Grexit" (Greek exit) in case it doesn't work out this time. Is that that new, or is just the first time I've heard it?


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

The AGG (bonds / F-fund) were down slightly but they are still a mess and probably not worth considering until the gets back above the 200-day EMA.


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

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Thanks for reading! Have a great weekend!

Tom Crowley


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