TSP Talk Blog

Stocks opened on the downside on Tuesday but immediately caught a bid and after the magic of a Janet Yellen congressional hearing, stocks accelerated to the upside closing at the highs of the day with the Dow, S&P, Nasdaq, and Russell 2000 all closing at another all-time high.

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The S&P 500 has been up for 6 straight days, and the Nasdaq 100 (QQQ) has made it 8 straight as the Trump rally kicks into another gear. Bonds were down and the Transports backed off from its triple top.

If you watch the mainstream media you would think that Donald Trump is destroying the world but the business community and stocks market are telling a very different story. It's almost at the point of the infamous irrational exuberance statement of the late 90's. The strength seems to have taken so many by surprise that the market has not had an opportunity to dip with those wanting in on the action hitting the buy button at every turn. Real or irrational, these gains are going into someone's account, but how long will they stay there? It seems like it would be time to ring the register if you have been in on this.

The SPY (S&P 500 / C-fund) was fueled by a Fed chairman hearing and Ms. Yellen rarely disappoints. The small gap opened on Monday remains open and that's something I expect to see filled within a few days, because that's what happens to open gaps. But in this market, I'm not sure we can always anticipate the typical.




The DWCPF (S-fund) closed for a 3rd day above it's flag - an "F" flag, a flag that typically breaks to the downside. The bulls are pushing the peddle to the metal so Godspeed to those enjoying the journey.




The Nasdaq 100 made it 8 straight days of gains yesterday and pushed above its already sharply rising trading channel this week. There's a lot of room for this to fall, if it does, but is it possible that a new administration's reign in on regulations and tax policies can make this one of those "it's different this time" situations? Investors seem to think so as stocks continue to be priced for perfection.




The Dow Transportation Index did not follow the herd and actually backed off from its triple top formation yesterday.




The EFA (not shown) was slightly lower yesterday as the dollar continued its rally off the the recent lows.




The AGG (bonds / F-fund) pulled back but closed off the lows of the day after hitting the rising support line.




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

Tom Crowley


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