TSP Talk Blog

Stocks opened lower and the early action did not look good, but there was some strong support below that we speculated the dip buyers may be interested in, and it turned out that they were. The indices had already bottomed when the Fed's FOMC meeting minutes were released, but investors were not discouraged by what was said. The Dow gained 22-points, which was about 100-points off the lows.

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The Fed minutes didn't really say anything new, but it reaffirmed the possibility of a rate hike this year, but most don't believe it will happen before the election.

The SPY (S&P 500 / C-Fund) fell early and eventually hit the levels of support we talked about yesterday where 217 could be an area where the dip buyers may be lying in wait. That was true, at least yesterday it was. That small open gap did not quite get filled, but it was close enough considering the other support in the area. From here, new highs will have to be made or the bears will try to take advantage.




The DWCPF (S-fund) hit the 20-day EMA but from a technical standpoint, there was a little damage done since it is now trading below the flag again, and the bottom of that flag that was support, could try to act as resistance - although it is still rising.




The Dow Transportation Index had a nice day gaining 0.40% and is on the brink of breaking out of the smaller (blue) of its two inverted head and shoulders patterns.




The EFA (I-fund) was flat and remained just below the old April highs. There's a little work to do here




We haven't talked about China in a while and that may be because it has been consolidating for the last 4-months in a large classic looking cup and handle formation, but it broke out recently and that old breakout point and the 200-day EMA could be strong support now. So China looks pretty good at the moment. It was this time last year that they shook our market ferociously.




The AGG (Bonds / F-fund) was up yesterday on Fed meeting minutes as bond traders also believe the Fed won't be raising rates soon. The chart held above the 20-day EMA but below the top of the flag formation. As it approaches an apex, something is going to have to give.




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

Tom Crowley


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