TSP Talk Blog

It was a bit of a rollercoaster ride on Wednesday, but the bulls were able to withstand a late morning push by the bears. By the close, the Dow had gained 122-points, which was off the early highs, but also well off the lows too, and the indices basically traded within a recent rising channel, that could be considered "F" flags.

Oil traded in a volatile range yesterday and that's something to watch. Also on today's radar is China. Its stock market has been closed since September 30 and it reopens Thursday, so brace yourself. Perhaps it pops on the positive action in the U.S. market, or it may have a mind of its own that could affect us negatively today.

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We're seeing "F" flags on many of the charts. That's a formation termed by a futures trader friend of mine, Oscar Carboni, for a bull flag that moves upward instead of downward, but eventually the chart gets uh, "F"ed, if you will.

You'll see some examples below.

The SPY (S&P 500 / C-fund) broke above some resistance this week (red dashed) after gapping up and leaving an open gap on the chart on Monday morning. There is more heavy resistance in the 200 - 201 area. You can see the F-flag forming now, but there are some better examples on the Transportation Index chart below.


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

The Dow Completion Index (small caps / S-Fund) still has some room overhead after a big day on Wednesday. The 50-day EMA and a double dose of resistance lines intersect near 1040.


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

The Dow Transportation Index has been the market leader and has been in a bear market since spring. You can see all of the F-flags on this chart and what usually happens to them. You can also see that, since July, this index has moved above the 50-day EMA for a few days before backing off each time.


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

The EFA (EAFE Index / I-fund) filled an open gap (blue) on Tuesday and is back within what looks like a big bear flag. There are still two open gaps below (red), but both are now below support lines. There is overhead resistance in the 61 - 61.50 area.


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

China's Shanghai Index reopens Thursday after a being closed since COB 9/30. With it being a catalyst for the U.S. indices over the last few months, this could be an interesting situation. Officially, it is still in a bear market.


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

Oil was down 2% yesterday but it traded all over the map moving up and down after an inventory report. $50 may be an area of resistance with 45 - 46 being possible support.


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

The AGG (bonds / F-fund) was basically flat yesterday and remains slightly bullish because of the rising trading channel.


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


Per www.tsp.gov: Some financial markets will be closed on Monday, October 12th in observance of the Columbus Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (October 12th) will be processed Tuesday night (October 13th), at Tuesday's closing share prices.

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. We'll see you back here tomorrow.

Tom Crowley

Posted daily at www.tsptalk.com/comments.php


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