TSP Talk Blog

Once again we saw the indices fade into the close after some solid gains earlier in the day, but for a second day they held onto some of those gains despite the afternoon selling. It doesn't make for very bullish short-term charts, but it does still add to the Fund returns. The Dow gained 41-points.

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The Intel earnings report was weaker than expected and that held back the Nasdaq comparatively, but oil rallied 2.4% helping the energy stocks of the Dow and S&P 500.

I am writing this before the Wednesday night Presidential debate, which of course could be a market mover for many of the reasons we've been taking about for the last few weeks.


The SPY (S&P 500 / C-Fund) temporarily moved above the 50-day EMA in yesterday's trading, but could not hold it into the close. I didn't draw it in today, but there could be a small bear flag forming and the key here will be whether that small open gap (blue) gets filled, which would eliminate the bear flag, but it will also put it at the descending resistance line. So, filling the gap would be good in a sense, but there would be a lot more work from there to move it above 216.




The DWCF (S-fund) also has a bear flag formed and the 50-day EMA is in the way. This is an important juncture that unfortunately favors a bearish outcome. A move above 1080 would be a bullish move technically since it would break two levels of resistance, but the bears have the ball until that happens.




The EFA (I-fund) is also testing the 50-day EMA from below and that's 7 closes below the 50 EMA. This is a big area for the bulls if they want to keep this bull market alive.




The High Yield Corporate Bond Fund broke to the upside of the bear flag that was trying to form, and surprisingly has actually closed at its second highest level of the year. That's a decent sign for the market.




The AGG (Bonds / F-fund) made a show of strength closing above the 50-day EMA, but bonds are still a little troublesome. That said, there's now not a whole lot of resistance until it gets back to the top of the channel - unless that's a head and shoulders pattern forming in which case the 111.90 - 112.00 area may act as resistance.




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

Tom Crowley


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