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Streak ends at 1 again

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Stocks opened lower yesterday and couldn't catch much of a bid all day, although the Dow did manage to close about 60-points off the intraday low. The 114-point loss means we still have not had two consecutive positive days in April. And if we go further back, the Dow has had only one two-day winning streak since 12-day winning streak ended in February, and that was back in early March.

Daily TSP Funds Return

Goldman Sachs fell nearly 5% on the day after a disappointing earnings report and that accounted for 70 of the 114-point loss in the Dow.

On the bright side, the small cap index Russell 2000, which was not as impacted by investment bank's earnings, managed to close with a small gain and our S-fund was basically flat. The tech heavy Nasdaq was also spared as it only lost 0.12%, but after the close yesterday IBM disappointed and was falling sharply after hours so that could put some more pressure on the Dow and the Nasdaq today.

Earnings are a test of what has already been priced in and expectations were pretty high going into earnings season so missing, or even meeting estimates, doesn't help the situation.

The SPY (S&P 500 / C-fund) tested and held at the 50-day EMA, but remains in a downtrend since the March 1 peak. Technically, it hasn't broken down yet but the bulls are certainly keeping their distance. They are in need of a catalyst like a resolution in the Far East or perhaps something more concrete on tax reform will do. One thing they don't want is disappointing earnings reports..

The DWCPF (S-fund) closed flat on the day, which is obviously good relative strength compared to the large caps and international stocks. But it closed below the 50-day EMA for a 4th straight day and also remains in a downtrend.

The Dow Transportation Index gave back half of Monday's gains and is now threatening to create a bear flag.

The EFA (I-fund) closed well off its lows and remains above the 50-day EMA but below the rising channel.

The three largest markets in the I-fund are Germany, London, and Japan. Germany and Japan have pulled back to areas that could provide strong support...

Japan fell through the 50-day EMA in March and is now looking to the 200-day EMA for support.

On the other hand, London was hit hard on Tuesday and fell through key support and this could be a problem since the next level of support is well below the current price.

The AGG (Bonds / F-fund) rallied on more selling in stocks and this time it basically filled that open gap created after the election. It took 5-months, but it's done. Now, can it continue higher, or was that the target?

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

Tom Crowley

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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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S&P 500 (C Fund)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)