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Another pullback, but the dip buyers are still around

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The bears are putting a little more pressure on lately, but the bulls are no going away easily. The indices opened with some moderate losses on Monday but the dip buyers were right there again. If there was a difference from the recent trend of strong closes, it was that there was some very late selling so it was a bit of a mixed bag.

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The Dow ended the day down 51-points and most indices closed well off their lows, but closer to the middle of the day's trading range because of that late decline.

A new healthcare bill is being introduced. There was a change to the immigration executive order. There's the whole convoluted Russian involvement in the election controversy, and now President Trump is accusing the Obama administration of wire tapping. How in the world do we analyze all that as far as stocks go? Other than that, everyone is waiting on the Fed later this month, as well as the debt ceiling deadline.


The SPY (S&P 500 / C-fund) filled the open gap from last Wednesday and got a bit off a bounce at that point. It did break below a short-term support line and that old support was yesterday's resistance. It wouldn't be the worst thing in the world for stocks to come back toward some of the more key support lines before going highs. The 20 and 50-day EMA would be welcomed by some to get the indices off overbought levels and into more opportune prices, and the 232 area may produce a double dose of support.




The DWCPF (S-fund) lagged yesterday but it climbed off its worst levels of the day. It closed below the 20-day EMA for the first time in over a month, and you can see it is also back within its wedge-like formation.




The Dow Transportation Index remains in its wedge formation and has pulled back for a few days since the new high made 4 days ago.




The EFA (I-fund) produced a positive reversal day but the 0.3% loss does take away something from that normally bullish development. There are a few cracks showing here but it's hard to get too bearish when we saw new highs just 3 days ago.




The AGG (bonds / F-fund) was down slightly on Monday. In the short-term there is that overhead open gap, but now we see a small bear flag forming and both are pretty formidable formations that will pull this bond fund in both directions. The overhead resistance looks tough, but open gaps are sometimes too strong of a pull.





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

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

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S&P500 (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes