TSP Talk Blog

Well, it finally came to an end. A 12-day winning streak in the Dow ended yesterday with a small 25-point decline. It was quite a run and matched the highest streak of the last 120-years. The S&P 500 saw modest losses while the Nasdaq, and particularly the small caps, saw a more significant declines percentage-wise.

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The February Consumer Confidence Index came in at 114.8, much higher than the 111.5 that was expected. It also happened to be the highest reading since July 2001. At extremes it can be a contrarian indicator. As you can see stocks took a pretty good hit in August and September of 2001, just after that economic data was released.




The jobs reports normally come out on the first Friday of the month, but for whatever reason the February report will not be released until the 10th, next Friday.

The SPY (S&P 500 / C-fund) pulled back slightly yesterday with no significant developments in the technical picture. New highs are just overhead and a small open gap is just below. There's another small gap near 232 that I didn't mark, but we'll worry about that only if the SPY falls below the first gap.




The DWCPF (S-fund) saw its second big hit in the last four days, but in between there were a couple of big positive days. Perhaps volatility is about to come back as the swings widen. The VIX was up 7% yesterday possibly confirming that.




The EFA (I-fund) was nearly flat and still in what looks like a small bear flag. There's an open gap just overhead and it can now be filled without moving above the bottom of that wedge formation, so 60.70 may be some stiff resistance.




The Japanese Nikkei moved up early on Tuesday to fill its small open gap, but that rally faded quickly and it produced a negative reversal day. I'm watching the 50-day EMA for no other reason but to look for a potential catalyst for U.S. stocks as they seem to be running on fumes right now.




The AGG (bonds / F-fund) gave up some early gains as we headed into Tuesday night's speech by President Trump. There are some concerns about economic policy announcement so the decline may have just been a cautious move by investors.




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

Tom Crowley


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