TSP Talk Blog

Stocks have been relatively flat the last couple of days and with yesterday being a Federal holiday, many banks were closed, as was the bond market so the trading volume was very light light and the action didn't prove very significant.

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The share prices above are from Friday. The TSP did not post prices for Monday.

Oil was down sharply so, with stocks higher, it appears investors are leaning toward the sentiment that weak economic data is good for stocks all based on hoping the Fed will not raise rates if the economy is slowing down.

Earnings season starts to kick into gear this week and that should be the main catalyst for stocks for the next few weeks.

The SPY (S&P 500 / C-fund) has bounced sharply since the recent low in late September but it is up against some resistance at the 200-day EMA, which is normally a tough nut to crack in a bear market, just as we'd expect the 200-day EMA to hold as support in a bull market. For the record, it's not shown but the 200-day Simple moving average is currently above 204. The open gap near 195 is still on the radar.


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

The weekly chart of the S&P 500 Index is testing the 50-week moving average, an area that failed in early September.


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

The Dow Completion Index (small caps / S-Fund) is testing the 50-day EMA and a descending resistance line.


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

The EFA (EAFE Index / I-Fund) has rallied about 8% off the September lows and it is now above the 50-day EMA but below a possible resistance area.


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

The daily chart of crude oil shows the big decline on Monday that took it back down toward the 20 and 50-day EMA's, which could try to act as support after breaking above it last week. This is still in a bear market so we probably shouldn't be calling for a bottom yet, and until yesterday the recent action has been on the bullish side.


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

But the weekly chart looks bearish as it is still in a large bear flag that started in June. Just a couple of weeks ago stocks and oil were on the same page but as I mentioned above, investors seem to now be using oil as one of the measures for the December interest rate hike decision. Weak oil could mean a weak economy, and that may help keep rates down, which in turn helps keep money cheap on Wall Street.


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

China's Shanghai Index has run up since the week long closing at the beginning of October. Yesterday's action broke through a bearish resistance line (green) but the 50-day EMA and a possible resistance line at the top of a bear flag (red) could pose some trouble.


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

The AGG (bonds / F-fund) was up on the day and bonds continue to to surprise as they hold up well despite the ongoing rate hike talk from the Fed. Bond price move counter to yields.


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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