TSP Talk Blog

Stocks rallied for a second straight day and the Fed said nothing in their policy statement to discourage the bulls. The Dow gained 121-points on the day and once again the Dow Transportation Index, the one in a bear market, was the big winner

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The TSP stock funds all gained about 0.7% while bonds were down.

The SPY (S&P500 / C-fund) is now only about 1% off its recent highs. If we continue in the trading range, new highs could mean trouble. If we finally breakout, it could be explosive since it has been creating a large base from which to breakout from. It is now back above the 20 and 50-day EMAs.


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

The Dow Completion Index (S-fund) is lagging and showing us that the broader indices aren't keeping up with the big guys. Technically, it is back above the 200-day EMA, but will it have the strength to break above the current descending trading channel?


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

The Dow Transportation Index has been in a bear market for weeks now, but yesterday it broke its intermediate-term descending trendline and it closed above the 50-day EMA for the first time since April. The 200-day EMA will no doubt be a factor, so we may know soon enough if this is a temporary relief rally or if the Transports are actually putting in a bottom.


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

The EFA (EAFE index / I-fund) rallied but lagged as the dollar was up after the Fed policy statement announcement. The 50-day EMA is holding it back at the moment, and there are still open gaps above and below. We did see some back-back from Tuesday's share price in the I-fund.


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

The dollar shot up after the Fed meeting and was able to fill an overhead open gap. The trend seems to be up right now, but let's see how it reacts to the top of that filled gap. Sometimes a filled gap will act as resistance.


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

The AGG (bonds / F-fund) was down slightly but closed off its highs. Like stocks, bonds got quite volatile after the Fed announcement, but in the end it closed with a small loss and back below the descending resistance line.


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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