TSP Talk Blog

Stocks added onto Friday's gains with more modest upside action on Monday, despite a sharp decline at the start of trading. The Dow added 68-points by the close, while small caps outperformed, and international stocks lagged.

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Bonds rallied along with stocks.

The SPY (S&P 500 / C-fund) broke above a key resistance line yesterday and may be on its way to completing the right shoulder of the inverted head and shoulders pattern. I don't want to get too ahead of myself but should the H&S rise to the neckline, the question becomes whether we get a breakout to the upside or a pullbacks and test of the middle of the head - two typical outcomes from an inverted H&S.


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

The Dow Completion Index (S-fund) broke above its descending resistance line but the 50-day EMA is looming just above.


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

The EFA (EAFE index / I-fund) has been lagging recently and while I see a potential inverted head and shoulders pattern - which should be bullish, it may already be in the process of testing the middle of the head. It's not necessary, but filling one or both of the open gas (blue) would do that. There is some support at last week's low that may turnout to be the low before testing the neckline, but we'll have to see about that.


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

The AGG (bonds / F-fund) was up so the rising trading channel's support line has held for now.


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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