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Mixed bag

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After a positive open, stocks drifted lower on Tuesday but once again we saw a mix of results as the Dow lost 37-points and the S&P was down 0.10%, the Nasdaq held onto a solid gain, while the Transports bounced back and small caps were flat. The dollar rallied and that put some pressure on the I-fund.

Daily TSP Funds Return

There was a quick spike lower in stocks at about 3 PM ET after North Korea announced another nuke test, but that was quickly erased as we headed into the close. It also caused bonds and gold, which were both down early, to rally into the close.

Retail stocks led on the upside, and of course large tech stocks to continue to soar, while the financials and energy lagged.

The S&P 500 / C-fund made a new intraday high near the open yesterday, but once it again it pulled back from that March 1st high. And that brings up the question that we have been asking for a few day --- is the 2400 the double top, or did we experience the double top in late April? Does it matter? Maybe not, but clearly investors haven't been overly anxious to buy into the recent test of new highs. Perhaps it needs another shakeup to bring in new money?

The DWCPF (S-fund) was flat and closed basically in the middle of its daily range yesterday. It started, and has experienced, its double top pullback in late April while the large caps have continued to flirt with new highs. That could be a bear flag forming, but it is holding up well at the 20-day EMA since bouncing off of the 50-day EMA last week.

The Dow Transportation Index bounced back 0.41% yesterday but it could not close above the 50-day EMA and it remains in a small bear flag, which is within a larger bear flag.

The EFA (EAFE Index / I-fund) pulled back with the dollar rallying yesterday, but it may have been due for that after the recent run higher. The low yesterday was right on the top of the old rising trading channel, so that will be the support test going forward.

The dollar gapped up for a second straight day, and that was enough to push it back above the 200-day EMA. The 50-day EMA is not too far overhead, and there is an open gap that would be closed if it hits 25.79, so I wouldn't be surprised if this rally stalls in that area, although the falling resistance line is up near 25.90 and that's a potential target too.

With the dollar up again, the price of oil was down another 1.2% yesterday, and we have been watching other economically sensitive commodities like copper, which has been barely hanging onto its 200-day EMA for the last several days.

The AGG (Bonds / F-fund) pulled back early and tested the 50-day EMA. The nuke testing news out of North Korea triggered a late rally. By the way, gold also popped late on that news.

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

Tom Crowley

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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)