TSP Talk Blog

Stocks remained relatively flat yesterday in front of today's important FOMC policy statement. The Dow ended the day up 13-points, the S&P and Nasdaq were basically flat as well, but small caps had a nice day. After the bell however, more trouble on the earnings front put some pressure on stocks after hours.

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Apple fell sharply after hours after they posted their first year over year quarterly decline. The stock was down more than 8% after hours and that will have a negative impact on the Nasdaq today. Twitter, Chipotle, and AT&T were also down after hours, while eBay was up.

Today we get the FOMC policy statement some time after 2 PM ET. Stocks have done well the day of the meetings, but according to sentimenTrader.com, over the past year ... "stocks struggled after the meeting with SPY showing a positive return over the next 7 days only 2 times and both were minimal. The worst performers were gold stocks while the best were bonds."

The S&P 500 (C-Fund) made a higher high yesterday above Monday's range, but it couldn't do much more than that. The overhead resistance remains in the form of the late 2015 highs, and now the bottom of the large rising wedge formation could hold it back as well. Other than that, the trading channel remains intact with 2075 as the next area of support.




The DWCPF (small caps / S-fund) is finding itself deep in the rising wedge formation. Rising wedges tend to break down but it is unusual to see them get this far into the apex. Something should give today with the support and resistance lines converging on an FOMC policy day.




The EFA (EAFE Index / I-fund) still has those open gaps that we keep referring to, with one being basically filled now. There may be a bear flag forming and that could bode well for the I-fund, but there seems to be a lot of charts in Europe and Asia that could go either way so let's see how it plays out.




With Apple down sharply after hours, the Nasdaq 100, the large tech stock Index, was down another 1% so I drew in the bar (red) as it might appear if the losses rolled into today's open. The significant part about where it was trading is that the loss put it back below the 50-day EMA and nearing the 200-day EMA again. That's obviously an important technical area to hold. You can see the rising trading channel already broke down last Friday.





The AGG (Bonds / F-fund) fell to the longer-term rising support line and held yesterday. I'd say there is still some room to fall to 110.00 if it want to test the February and March peaks and the 50-day EMA, and they must hold or the rising trend could be over. So far this has been a healthy pullback in bonds.




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

Tom Crowley


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