TSP Talk Blog

Stocks opened lower on Thursday and except for a late attempt at a rally, stayed deep in negative territory for most of the day. It ended the day down 255-points after a push off the 412-point loss 90 minutes earlier. Buyers were hard to come by and as we head into the long weekend, you would suspect that investors will be worried about holding.

Per tsp.gov: "Some financial markets will be closed on Monday, February 15th in observance of the Presidents' Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (February 15th) will be processed Tuesday night (February 16th), at Tuesday's closing share prices."

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The pop off the lows came as oil was rebounding after the Wall Street Journal paraphrased a United Arab Emirates Energy Minister as saying that "OPEC members are ready to cooperate on a cut."

The SPY (S&P 500 Index / C-Fund) hit the January lows hard on Thursday and at least temporarily stopped the bleeding and got some relief. Being in a bear market I suspect these lows will eventually be taken out, but perhaps this would be a good area to get some relief. Note that the small caps, the Nasdaq, and oil have already been making lower lows.




The Dow Completion Index (small caps / S-Fund) closed off the lows but it did fall through support and made a new low. The small caps and the Transports have been the leaders on the downside so this is a concern, of course.



Lately however, the Transports have been able hold above the old lows and modestly outperforming, but it remains in a bear flag and that 50-day EMA will be tough to get above in a bear market.




The recent action is starting to look like the 2008-2009 decline - formation wise. Percentage-wise it's not really that similar yet, unless, and this is the scary part, the recent pop from point "A to B" is where the "X" is in 2008. The early Sept. 2008 high to point A was a 11.5% decline, so it's possible that the comparison could be made there.




The price of oil was down again on Thursday but got a boost late about the time stocks turned around when there was talk of cutting production. It could be a possible positive reversal but it has to get above the January lows again.




The 10-year yield tanked again on Thursday but closed well off the lows. A new gap was created and I suspect those gaps will start to look to get filled, which means bonds and the F-fund may pullback some in the short-term. But still, bonds and the F-fund, which move counter to yields, are in rally mode. If yields continue to sink, we really have to question the economic outlook of the U.S. and the world - if we haven't already.




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Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


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