TSP Talk Blog

Stocks gapped open higher on Monday after another potential deal for Greece was made. The Dow gained 104-points. That was off the early highs but still another triple digit gain for the Dow, or +0.58%.

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The European stock markets soared on the Greece bailout talks and it really sent the I-fund flying yesterday. Here's what happened in London, Germany, and Paris respectively.



Bonds resumed their downside trend.

The SPY (S&P500 / C-fund) made a higher high after gapping up on Monday, but it closed closer to the lows than the highs and it could be a potential negative reversal day. Since there was a small gap created at the open yesterday, the negative reversal has me believe that filling that gap is the short-term target. Volume was quite light, and while this isn't a major indicator, you can see that light volume positive days have occurred more near peaks than lows.


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

The Dow Completion Index (S-fund) made a new all-time high picking up about 0.5% on Monday. There could be some overhead resistance using the parallel rising channel and sentiment for small caps is getting a little excessively bullish.


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

The Nasdaq 100 (QQQ) made a new intraday high on Monday but closed below the two recent peaks. Double tops generally precede pullbacks as we saw in late May, but triple tops aren't usually quite as bearish. Small pullbacks are likely but we don't usually see a decline like we get at double tops.


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

The EFA (EAFE index / I-fund) exploded higher on the back of another probable bailout for Greece. A large gap was opened and the early gains nearly filled an open gap from May near 68.0. That's a big gap down below 66.50 so it could be a little vulnerable for some give-backs in the short-term.


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

The dollar (UUP) posted a positive outside reversal day, which makes sense with Europe planning to give a bunch more money to Greece, but was the rally in the dollar just part of a bear flag that seems to have formed?


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

After a day above the 200-day EMA, the AGG (bonds / F-fund) fell back below it on Monday and is back at the bottom of a big bear flag. This could still be a "V" bottom, but it looks like a flag with the sharp decline followed by the slower consolidation on the upside.


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


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