View RSS Feed

TSP Talk Blog

Rally continues

Rate this Entry

Stocks were up sharply again on Thursday with large cap stocks leading the way. The Dow gained 134-point on the day while small caps saw more modest gains. The Bank of England did not cut interest rates saying they will delay it until August, and the market seemed to be good with that as investors opted for stocks over the low yields we're seeing around the world.

Daily TSP Funds Return

I know there is an urge to sell this rally. It has come very far, very quickly, but a lot of that was just recapturing the losses of the Brexit sell-off. The thing here now is, stocks are rising and are performing well. Whether they should be performing well may be your concern, but trying to step in front of a moving freight train can be very dangerous. Strong momentum is not easy to stop.

Even if you are bullish right now and in stocks, you probably should be hoping for a couple of flat to down days to try to create some more realistic support lines on the charts.

The SPY (S&P 500 / C-Fund) is obviously in an unsustainable angle of incline but this kind of action is more inclined (no pun intended) to create a bull flag than a long-term peak. Watch support level on any pullback to make sure they hold. That 213 area looks pretty solid at this point.




The DWCPF (S-fund) lagged for a second day yesterday but it remains in its sharp rising trading channel. There are a few open gaps that may get some attention, but there is also some room above if the rally wants to continue.




The Dow Transportation Index has now convincingly broke above its intermediate-term descending resistance line (red) this week and is now approaching the 2016 highs. But it is now bumping against a long-term resistance line (blue dashed) line so this is another test for this market leader. It looks like a huge cup and handle and that could turn out to be very bullish - if it breaks out.




The EFA (I-fund) is still reaching up to try to fill that large gap (green) created by the Brexit sell-off. It has opened some small gaps (red) along the way. It has closed above the 200-day EMA for a third straight day giving us some confirmation of the breakout, but let's see how it reacts to any pullback. We know how luring those gaps can be.




The AGG (Bonds / F-fund) was down but closed strongly. That 112.50 is holding as support but there still several open gaps that may need to help clean things up. Two of those small gaps are on the upside so short-term strength is possible.



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. I will see you back here on Monday or Tuesday, as I may be taking Monday off.

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.

Submit "Rally continues" to Digg Submit "Rally continues" to del.icio.us Submit "Rally continues" to StumbleUpon Submit "Rally continues" to Google

Comments


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