TSP Talk Blog

Stocks chopped around in a tight range for most of the day on Monday, but closed near the lows. The bulls would pop the indices higher, but the bears swatted them back down. By the close stocks were down very slightly with the Dow slipping 8-points. Volume was light and as folks on Wall Street might say, yesterday was a waste of cab fare and a clean shirt.

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The bulls had an opportunity to follow-through on some bullish action late last week, but as you will see below, there is a small open gap that may keep the S&P in check until it gets filled.

The S&P 500 (C-Fund) was down 0.21% yesterday and remained in the area of the right shoulder of the head and shoulders pattern, and holding just north of the important neckline support.




The SPY chart shows that small open gap that will be a lure until it gets filled. If it does get filled it will be another test of the 50-day EMA and that neckline above.




The DWCPF (S-fund) temporarily moved above the 200-day EMA but could not hold into the close. It remains above the descending resistance line that it broke on Friday.




The Dow Transportation Index remains in a bear flag, and it's the second bear flag since the peak in April. A bear flag below the 50 and 200-day EMA's smells like possible trouble for this market leader, which has faded since the double top.




The EFA (I-fund) is also struggling below the major moving averages. The small open gap that was formed on Friday did get filled, and that's what we're expecting on the SPY. But where it goes from there...? There's been some damage done here.



The AGG (Bonds / F-fund) remains in a bear flag and holding onto the 50-day EMA for support. The fear of a June rate hike has stalled the recent rally.




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

Tom Crowley


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