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Rally day 3

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Stocks rallied for a 3rd day as we saw a bit of a melt-up where we had a combination of panic buying from those afraid to be left behind, and short covering from those who were betting against the market and had to get out of that position. The Dow ended with its 3rd consecutive 200+ point gain at +235-points.

Daily TSP Funds Return

The gains nearly completed a full recovery of the Brexit sell-off, but not quite, and the S&P is now within about 1% of a new 2016 high. What a difference a few days makes after we started the week at Monday's close looking into the abyss.

The SPY (S&P 500 / C-Fund) gained 1.36% filling the gap from the post-Brexit vote. It is now nearing the 2016 highs but the area near the old highs has been acting as resistance for over a year now. The only meaningful open gap left on the chart is down near 203 from Wednesday's morning gap up open.




The DWCPF (S-fund) had a big day but it remains more meaningfully below its recent highs. There is a gap still partially open between 1040 and 1050 but there is also some descending resistance getting in the way of that gap. The other major open gap is just above 990.




The Dow Transportation Index has rebounded significantly off the recent lows, pushing it back into it trading channel. But that trading channel is a descending channel and there is a lot more work to be done to get back to the 50 and 200-day EMAs.




The EFA (I-fund) gained about 1.5% yesterday. There are major gaps above and below the current level which means that volatility could remain high this summer as it tries to get them filled, but which will be filled first? That's what we want to know.




The AGG (Bonds / F-fund) was up again and made a new 52-week high? While stocks are soaring? This is certainly unusual, but the word is, with bond yields at or below 0% in many major foreign markets, the U.S. Treasury is still paying almost 1.5% by comparison. That's a good reason for stocks to be rising since S&P dividends are paying a lot more, but for those who want a safe return, the U.S. 10-year seems to be adequate for them.




From www.tsp.gov: "Some financial markets will be closed on Monday, July 4th in observance of the Independence Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (July 4th) will be processed Tuesday night (July 5th), at Tuesday's closing share prices."

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

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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S&P500 (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes