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Mixed, slow, and leaders are lagging

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Stocks were mixed and fairly flat again on Friday with the Nasdaq being the lone positive of the U.S indices, and the Dow and S&P posting slight losses. The small caps and Transports lagged again, each dropping 0.4% on the day, and the I-fund had a nice day as the dollar gapped lower.

Daily TSP Funds Return


The S-fund lost about 1% last week while the C and I-funds slipped 0.26% and 0.37% respectively. Bonds (F-fund) led the TSP funds with a gain of 0.21% on the week.

The action continues to be lackluster as investors wait for the next catalyst. The next FOMC meeting is still a month away so we should see some jockeying for position with each economic report in the interim. The Fed is expected to raise rates again but anything that could change that outlook would get some attention.



The S&P 500 / C-fund was down on the week after Friday's small loss, and the index continues to hover just below those recent highs after the failed breakout last week. We saw a breakout from a bull flag but the double top is keeping a little pressure on, and that could be the continued lure of those rare open gaps.




The DWCPF (S-fund) made a 3rd move down to the 50-day EMA on Friday and it looks like a possible bear flag breakdown, but that 50-day EMA has stubbornly held as support so far. Take away that 50-day EMA and this chart doesn't look so good, but the 50-day EMA is there and that's what the bulls are counting on for help.




The Dow Transportation Index is in the throes of breaking down from a small bear flag itself, and it is precariously holding just above the bottom of a much larger bear flag which, if broken, would have a troubling downside target.




The EFA (EAFE Index / I-fund) bounced back above that old resistance line that it had fallen back below for a day last week. The falling dollar has been a big boon to the I fund all year after the dollar peaked on the first trading day of the year - and that's why the I-fund is leading the TSP pack this year.




Here is that chart of the dollar (UUP), which peaked to start the year. It filled an open gap on Friday but there is one more small one below, and after the gap down on Friday, there's a small gap overhead.




Keeping an eye on China and that head and shoulders pattern, we see that the test of the middle of the head is about complete. Any more upside would be a big boost for this index, but this tends to be a tough area to crack for head and shoulders patterns and the U.S. market could be waiting on this to resolve.



The AGG (Bonds / F-fund) rallied strongly on Friday, opening a new gap and breaking above the short-term descending resistance line. This now actually looks pretty bullish for bonds - long as it remains above the old resistance line and the 50-day EMA.




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: www.tsptalk.com/plus.php

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

Tom Crowley


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


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)
S&P 500 INDEX,RTH (^GSPC)
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)