TSP Talk Blog

Stocks opened slightly higher on Tuesday, but over all it was a disappointing bounce considering the damage done on Monday. The bulls were able to close the indices off the lows, as they did on Monday, but the action on Tuesday suggests the bears are still hanging around. The Dow gained 10-points on the day and the broader indices were mixed but mostly flat.

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The Asian markets tried to bounce back, and the Shanghai did put in a nice reversal day, but it was not able to get any of the 7% loss from Monday back, closing down modestly.

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The SPY (S&P 500 / C-Fund) made a less than exciting attempt to follow-through on Monday's reversal and barely made a dent in the large open gap. It is trading below the 200-day EMA so the next levels of resistance are at the 200-day EMA near 202 and change, and then 204 where the top of the open gap and meets the 20 and 50-day EMAs.


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

The Dow Completion Index (small caps / S-Fund) also failed to make any headway off of Monday's reversal. It could be the start of a bear flag but we can't rule out it moving up to fill the open gap at some point.


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

The Nasdaq 100 (QQQ) held at the 200-day EMA which is a temporary good sign. The bad sign was that it closed down and was unable to hold inside the open gap.


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

The EFA (EAFE Index / I-fund) also lost ground and showed little life, although it did close well off the lows.


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

The Chinese's Shanghai Index plummeted intraday again on Tuesday, but it rebounded strongly getting back most of the early losses. This chart is broken and the question is, how much do we care at this point with the Fed already raising interest rates? Would more selling be enough to stop the rate hikes?


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

The price of oil resumed its downward action on Tuesday. The old resistance line has been holding up as support, but that support is falling fast so it's not much for oil bulls to hang their hats on. It looks like a break of a bear flag so the question is, how low can oil go?


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

The AGG (Bonds / F-Fund) was flat and stuck between the 50 and 200-day EMAs.


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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