TSP Talk Blog

With Janet Yellen giving testimony on Capitol Hill yesterday, the market moved tentatively all day. Add to that tomorrow's Brexit vote and investors kept their distance for the most part. The Dow gained 25-points on lighter than average volume, while small caps lagged for a change.

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The polls remain fairly close for tomorrow's Brexit vote and hearing the British talk it sounds like it could go either way, but the book makers still have the odds at about 3 to 1 in favor of Britain remaining in the Euro Zone, and looking at the London FTSE Index, it looks like investors have become less concerned.




But make no mistake about it, a "No" vote would really shake things up, even if just temporarily. And a "Yes" vote could actually see a "sell the news" reaction if people are buying the rumors, so there's no certainty here. Best case for stocks is that there is a lot of scared money not convinced the vote will be "Yes" and that could trigger some buying if it is a "Yes" vote, but generally when we hear news, it's already been priced in.

The S&P 500 (C-Fund) ended the day slightly higher but it was a back and forth day. Monday's open gap did not get filled yet, which is a little surprising since the lure and catalyst was there. Instead, the top of the open gap acted as support. There is another open gap above at 210.




The DWCPF (S-fund) did pullback and fill Monday's open gap. The only gap left here is up near 1045. This looks like a positive formation but any surprises could mess with the clear support areas and moving averages.



I know I seem to be obsessing about the gaps lately, but we've seen so many recently and they are getting filled quickly so it's a pretty good road map for short-term direction.

The EFA (I-fund) had 4 open gaps when it bottomed last week, and now 3 of those gaps are filled (blue) - a little surprising considering how steep the losses were. There are still 2 open gaps (red), the ones that coincide with the U.S. index charts - from Monday and June 9.




The dollar even cleaned up a little yesterday filling its open gap from Monday morning. All the gaps are now filled here.




The AGG (Bonds / F-fund) was down and remains in a short-term downtrend since hitting the longer-term resistance line. There's another major gap that would get filled if the 50-day EMA is tested near 110.75.




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

Tom Crowley


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