TSP Talk Blog

For the 9th day in a row, stocks alternated between a positive day and a negative day, and there have been only 2 days this month that saw a repeated move (both up). Yesterday's gain was a good one with the Dow adding 113-points. There was a little bit of selling as we approached the close to push the indices off their highs thus avoiding breakouts from the trading channels they have been in.

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The rally seemed to be a reaction to President Trump's actions on regulations and the pipeline, so money managers may be seeing what they want as far as Trump making good on some of his campaign promises. But, the indices only made it to the top of their ranges so we'll see just how convinced the managers really are when the indices hit that overhead resistance.


The SPY (S&P 500 / C-fund) rallied convincingly most of the day yesterday before dipping toward the close after hitting the upper resistance line. The "F" flag is still intact, and although they tend to breakdown, the angle of this incline isn't like a typical "F" flag. That rally you see below in November is more typical of an "F" flag, and it did break down, although less than you normally see from an "F" flag breakdown.




The DWCPF (S-fund) also hit the top of its flag / trading range and stalled, but the gains were very impressive. Gains haven't been holding lately so we'll get the test right away.




The Dow Transportation Index also hit the top of its flag so the entire U.S. market seems to be in the same situation.




The EFA (I-fund) made a new multi-month high yesterday and has been leading the way higher with the help of the sinking dollar.




The AGG (bonds / F-fund) was down on the day and the bear market action seems to be coming back here, although a case could be made that we have a bull flag formed here. The only thing that might spark a rally however, would be a sell-off in stocks as a safety play.




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

Tom Crowley


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