TSP Talk Blog

Stocks pulled back on Thursday, and after a negative open, we saw no push back from the bulls for the first time in a while. The bright side is, a 113-point decline in the Dow after a gap open 300+ gain the prior day is not really sending any red flags. Of course every market top starts with a pullback from a high, but the bulls rarely go away that easily.

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We were due for a little profit taking and in the moderate pullback Thursday, the safety plays like bonds and gold were also down, so there really isn't anything yet to be alarmed about. So, a modest pullback after what's happened recently is pretty normal.

The SPY (S&P 500 / C-fund) lost 0.63% on the day as it poked its head down into Wednesday's open gap. I would expect that gap to get filled since gaps almost always get filled, but of course in recent times, that has not been a given




The DWCPF (S-fund) lost over 1% on the day pulling back from the new highs it made on Wednesday. It's still above the old resistance line that it broke out from about 3-weeks ago.




The Dow Transportation Index pulled back and technically this looks like a failed breakout, but it remains above the 20-day EMA so saying this is bearish is a little bit of a stretch at this point.




The EFA (I-fund) slipped back under that pesky rising wedge that won't go away. It's back below the wedge and wedges do tend to break down.




The dollar rallied sharply for a second day but it is now testing some overhead resistance.




The AGG (bonds / F-fund) was down again and the loss pushed it below some key support after a fake out breakout at the end of February. That large gap should get some attention but it would have to break back into the wedge to get there. Tricky situation for bonds. If stocks somehow continue to move lower, it would more likely that the gap gets filled.




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Thanks for reading. Have a great weekend!

Tom Crowley


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