TSP Talk Blog

Stocks plummeted on Thursday as the Dow lost 350-points on more weakness out of China and economic growth concerns here in the U.S. The losses were 2% plus in most indices as the charts continue to deteriorate.

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Bonds were up while stocks were, ah... down. The weak dollar helped the I-fund some, but still... ouch!

I've been trying to take a little time off with friends in from out of town, but the market seems to like to act up when I do that. Looking away on action like this past week may be your best approach so you don't act too emotionally. Yes, things are ugly and they can get uglier, but buying opportunities are usually close at hand when things look their worst. I don't want to analyze things too much since emotions are mostly in control right now and it's easy to over think things.

If you aren't a subscriber to Intrepid Timer you have missed some great trades this summer. He has limits on the number of subscribers he will accept and I do see some openings for anyone looking for a hot hand hand right now. My Plus System has had a very nice year but unfortunately it didn't sniff out this recent drop. This weakness has caught the system and me by surprise. It'll be OK, but it would have been nice to have been on the sidelines for this pullback. Way to go, Intrepid!


The SPY (S&P 500 / C-fund) broke down below the 200-day EMA and the intermediate-term support line. A snap-back rally is certainly a possibility but the chart needs to repair itself or it will go the way of the Transports - i.e. a bear market. The Dow is very close to doing that now.


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

The weekly chart of the S&P 500 has fallen below the 50-day EMA, something that hasn't happened since last October. You will notice that last October's breakdown didn't close below the line so there was a snap-back rally before the end of the week. We won't know what the current bar will do until today's (Friday) close.


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

The Dow Completion Index (S-fund) fell back below the 200-day EMA and the downtrend continues.


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

The EFA (EAFE index / I-fund) lost 2.4% and that was enough to fill both open gaps. It is now testing the July lows and that's another important one.


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

The AGG (bonds / F-fund) was up, but not as much as you might expect given the carnage in stocks. Perhaps the falling dollar had something to do with it. Bottom line, bonds have been moving up and yields down, which probably means interest rates are not likely to be rising in September. At least as things look now.


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 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! Have a great weekend!

Tom Crowley


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