TSP Talk Blog

Stocks opened moderately higher on Tuesday but they drifted lower most of the day closing just off their lows, but the three major indices, Dow, S&P, and Nasdaq, did close without losses. The Dow gained 38-points but the S&P was flat and small caps were down on the day.

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After hours, an oil inventory report came in higher than expected putting some additional pressure on the price of oil after a -1.6% day. The red arrow represents where the futures market was trading as I write this Tuesday evening and you can see that it is flirting with a last levels of support and the 50-day EMA. The stock indices' futures also moved lower on that report after hours as well, and that's the concern.




The SPY (S&P 500 / C-fund) rallied early to retest Friday's jobs report rally high but once it reached it, things backed off again. Like I've been saying, the bulls seem reluctant to buy once we approach 230 (2300 on the S&P 500), but the bears are not putting enough pressure on to take any momentum back. It's a wait and see market right now.




The DWCPF (S-fund) had a bad day but it did fill a small gap on the way down and that may have been the target. We'll see. Nothing awful here but no appetite from the bulls to buy up here.




The Dow Transportation Index was down modestly yesterday after Monday's negative reversal day. It's trading above the 50-day EMA so that's all good, but again the upside momentum is waning.




The EFA (I-fund) was pretty flat yesterday but the dollar rallied putting some pressure on it. I may be overreacting, but I'm watching Japan closely since it is flirting with a breakdown below the 50-day EMA after making a lower high in January. If it's not oil, perhaps the next catalyst will be Japan if there's any kind of technical breakdown. It feels like something is brewing here.




The dollar was up on the day but backed off after hitting the 50-day EMA. However, it made a nice technical move breaking above the descending trading channel. The fate of the I-fund, as far as its performance relative to the S&P 500, will depend greatly on which side of the 50-day EMA this ends up on. A move to the upside in the dollar puts more pressure on the I-fund's price.




The AGG (bonds / F-fund) rallied again after breaking above the 50-day EMA on Monday, but will face some serious resistance near 108.75.




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

Tom Crowley


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