TSP Talk Blog

Stocks floundered a bit after Friday's big jobs report triggered rally. It's not the worst action in the world, but the bulls will have to wait another day to see if they can finally break out of this consolidation / trading range. The Dow lost 19-points while small caps and the I-fund lagged.

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The FOMC is behind us and earnings season is nearing an end so the market may jump back on the "what's President Trump doing / saying" catalyst.

I mentioned Japans' Nikkei Index yesterday and that may get interesting if it doesn't start to rebound off of the 50-day EMA it is testing now. The chart hasn't broken yet but there are some cracks, and if the U.S. markets are in need of a catalyst, it could look this way.

The SPY (S&P 500 / C-fund) has been able to hold above the breakout level of somewhere in the 227 - 228 area. That was the peak in December and we saw a convincing break above it on January 24. Remaining above that level is the key here but it is waffling while the bulls try to gather the strength to push it out of this range. The bears may have something to say about it as they are sensing reluctance from the bulls to continue to buy when the SPY nears 230.




The DWCPF (S-fund) remains just a couple of points above the early December peak, but it has recaptured that level after falling below it for a few days last week.




The Dow Transportation Index posted some early gains yesterday but it looks like a negative reversal bar formed as it closed near the lows of the day. That could mean more losses early today but the key will be where it closes. Another test of the 50-day EMA may not work out the same as it did last week.




The EFA (I-fund) gapped open lower on Monday and we saw another rising wedge fail. The 50-day EMA is a long way down as the next support level, but it may all depend on the dollar.




The dollar bounced early yesterday nearly closing an open gap and hitting some overhead descending resistance, but then retreated and closed near the lows of the day. This early strength may have been part of the reason why the I-fund lagged as it did.




The AGG (bonds / F-fund) made a bold move above the 50-day EMA showing some strength after multiple failures at resistance last week. It looks like the 200-day EMA may get tested again after all.




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

Tom Crowley


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