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Big reversal on tragic news

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Stocks opened lower on Thursday, but then posted the biggest intraday reversal since March as the Dow moved 280-points from the lows to the high, and it closed up 93-points. The tragedy of it is that it seems to have been set off by the murder of a female UK lawmaker who favored keeping Britain in the EU and the thought seems to have been that this decreases the chances that Britain will vote to stay in the EU in next week's vote.

Daily TSP Funds Return

The reversal was stark but not all indices finished positively as small caps and the Dow Transportation Index came a long way, but still closed in negative territory.

The SPY (S&P 500 / C-Fund) fell through the important 50-day EMA before things turned around and it closed back above it. It did not make it back above the old rising support line, which could now act as resistance.




The DWCPF (S-fund) fell below both 50-day EMA and the long-term rising support line, but the reversal helped it moved back above those key levels. It did close slightly lower despite the big positive reversal.




The Dow Transportation closed down but produced a major positive kangaroo tail reversal formation, similar to the one we saw near the lows in February. The chart is beaten up and even if the upside continues, there is a lot of resistance when it gets up to the 7700-7800 area.




The EFA (I-fund) also reversed hard after falling below the April lows. There are still three open gaps above, but the decline was so severe, filling them may take some time.




The dollar finally filled that large open gap from the jobs report, and then it started to back down as we thought it might. Once a gap gets filled the lure in that direction gets weaker. Now the gaps are all below the current levels. If they get filled the I-fund would benefit.




The AGG (Bonds / F-fund) was up but closed well off the highs and remains in the narrow rising trading channel.




Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php

Thanks for reading. Have a great weekend!

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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