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Once again stocks were mixed but hung around the breakeven level with just minor gains or losses in the three main indices. The Dow lost 33-points but the S&P 500 and Nasdaq posted small gains. It has been quiet out there and the VIX remains near 25 year lows.

Daily TSP Funds Return

There was a little more movement in our market leaders, the Transports and the small caps, but just to keep us guessing, one was up, and the other was down. The small caps rallied 0.5% while the Transports lost 0.6%, and as you will see below, the Transports have now broken down from a bear flag.

The political rumblings had little to no impact on the trading as investors are quiet waiting for the next catalyst. Now that earnings season is wrapping up, the things to watch include the price of oil, which rallied yesterday, and declining commodity prices. Also the dollar, the nuke testing in North Korea, the anticipation of a June rate hike from the Fed, and perhaps signs of a credit issue in China. Other than that, it's been a yawner.

The S&P 500 / C-fund continues to hover just below the March high and despite a reluctance of the bulls to show much enthusiasm at these levels, the bears have done little to make them worry. And of course the VIX (Volatility Index) shows virtually no sign of worry from investors. But that could be an issue in and of itself.

The DWCPF (S-fund) had a nice day gaining 0.46%, moving back to the top of its bear flag. Bear flags tend to break to the downside but because of that big reversal day last week at the 50-day EMA, it could be a "V" bottom forming, but because it is moving more sideways than up, the bear flag may have an edge. A meaningful move, and a close above, 1215 could change that.

The Dow Transportation Index has now closed below its 50-day EMA for 3 straight days and yesterday's action would qualify as a bear flag breakdown. That's not something the broader market wants to see from the market leader.

The EFA (EAFE Index / I-fund) was up slightly and remains above that old resistance line, which is now trying to hold as support.

The Chinese Large Cap Index Fund has rallied strongly off of the neckline of the head and shoulders pattern we talked about the other day. A break down probably would have had a negative impact on our market but instead it rallied off that support line, and the next move would be a test of the middle of the head.

This is how those H&S patterns tend to unfold. Either a test of the head, or a breakdown, but neither tend to end well...

The price of oil rallied sharply yesterday but it too is in a possible bear flag and it is testing the top of that flag. Like the small caps, the flag is forming above a major reversal day so it's not an easy call which will win out yet.

The AGG (Bonds / F-fund) was up a bit yesterday after falling below a bear flag but rebounding off the 50-day EMA. It has now closed below the 20-day EMA for 5 straight days but that support near 108.40 looks fairly solid.

Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to:

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

Tom Crowley

Posted daily at

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)