TSP Talk Blog

The Dow lost 35-points on Monday but the major indices were quite mixed with strength in the small caps and the Nasdaq, and weakness in indices with exposure to oil and China, which were down sharply.

Earnings season is winding down and now all eyes are back on interest rate impacting data leading into June's FOMC meeting.

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This chart of China's Shanghai brings back concerns of an economic slowdown in China, which could have global implications but moreover, with earnings season over, the market will start looking for another catalyst, and this one would not be a bullish one.




Oil lost nearly 3% yesterday after a positive open. Now there could be many reasons for a decline in oil prices, but weakness in China would be a big one. The market is looking for direction right now and these two charts could be a big part of that process.




The S&P 500 (C-Fund) was up slightly yesterday keeping its head above the Friday close so we did see some follow-through, although minor, from the rebound off of the 50-day EMA. For now however, the short-term trend is down after the rising support line broke in April.




The DWCPF (S-fund) also rebounded off the 50-day EMA last week and while it's too early to say that we're seeing a "V" shaped reversal, the move back above the 200-day EMA is a good start.




The EFA (I-Fund) also tried to reverse higher, but it fell a little flat and could not close above the 50-day EMA.




We're seeing some trouble in some European charts like the London FTSE which remains below the 50-day EMA after falling below it last week.




But the German DAX improved by closing back above the 50-day EMA, potentially forming a higher low, after last month's higher high.




The AGG (Bonds / F-fund) was up slightly and remains above the key 110.80 area where it had broken out last week.




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

Tom Crowley


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