TSP Talk Blog

Stock opened higher on Wednesday, feeding off of Apple's strong earnings report, but the indices peaked quickly and once again we saw a morning sell-off that caught a bid by late morning / early afternoon. The Nasdaq led the way with tech stocks rallying on the Apple report to have a sold day. The Dow closed with a gain of 27-points, while the S&P and small caps were fairly flat as well.

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The 2:00 PM ET Fed policy statement did generate some movement int he markets, but it was temporary as there weren't any major surprises.

We get the January jobs report on Friday and briefing.com's consensus estimates are looking for a gain of 170,000 jobs being created, although their own forecast is +235,000. The unemployment rate estimate remains 4.7%.




The SPY (S&P 500 / C-fund) rallied up to the top of its flag formation, nearly filling the small open gap from Monday before retreating and closing the day basically flat. The positive reversal day on Tuesday did produce an early gain on Wednesday as we might expect, but it didn't mean it had to hold. The 20-day EMA held again and other than a possible bearish rising wedge, the only concern here seems to be whether it can get above that gap and take back the flag breakout that failed earlier in the week.




The DWCPF (S-fund) filled its open gap (blue) and closed back within the flag formation after an early poke above it. It's difficult to call this bearish except failed breakouts don't happen without a reason. Like the SPY, it needs to recapture the flag breakout level of 1180.




The Dow Transportation Index lagged again as UPS's stock got smacked for a second straight day. UPS has now lost all of its post election gains closing at 105 after hitting 120+ in December. The 50-day EMA has held on the Transports so far, so no major damage done technically yet.




The EFA (I-fund) rallied yesterday filling its open gap yesterday (blue) but closing off the intraday highs and below the rising wedge formation. Still near the highs but there's some minor cracks developing.




The AGG (bonds / F-fund) was down as the chart struggles to move forward with all of the overhead resistance. If there's anything bullish here it's that the bond bears have not done much damage in recent weeks and bond sentiment is arguably getting overly bearish again, like we saw in December before that rally.




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

Tom Crowley


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