TSP Talk Blog

It was another disappointing day for stocks on Tuesday as an early rally faded yet again and closed near the lows of the day. The losses weren't terrible, but it's the inability for the indices to hold onto early gains, and except for Friday's strong close, this has become a recent trend. The Dow ended the day down 54-points.

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The weakness may be attributed to a seasonality issue within this part of earnings season. As you can see here, the 22nd thru 27th of October had a weak history, but things change on the 28th. You don't want to base your investment decisions solely on seasonality, but sometimes it can be very telling.


Chart provided courtesy of www.sentimentrader.com

Apple posted some disappointing numbers after the close yesterday and that is putting some pressure on the overnight futures.


The SPY (S&P 500 / C-Fund) chart has a lot going on with one gap filling and holding as support, one gap still open, a bear flag, the 50-day EMA being hopped back and forth, and some descending resistance. There's a lot of possibilities, but there's no doubt that the bears are starting to get more a aggressive. In the past, this is about the time where the bulls start to take over again, but will they this time?




The DWCPF (S-fund) filled its open gap while falling further below the 50-day EMA and testing the bottom of its bear flag. This chart needs some help because if this bear flag is going to break down, as they tend to do, it may be imminent. The bulls need to step up or we could easily be seeing 1060 being tested again soon.




The Dow Transportation Index continues to try to hold above the important 50-day EMA but the recent trend has been weakening since making a higher high earlier this month.




The EFA (I-fund) was down slightly but the weakness in the dollar helped. It remains below the 50-day EMA and above the 200-day EMA.




The German DAX and Japanese Nikkei have been performing well recently with both hitting new multi-month highs yesterday. If the DAX can break above the 10,800 area, we could see more positive numbers spread in other global indices, including the U.S.




The AGG (Bonds / F-fund) continues to try to fill in a right shoulder of the head and shoulders pattern, which is below the 50-day EMA.




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

Tom Crowley


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