TSP Talk Blog

Stocks opened higher on Monday morning and the indices quickly ran up to try to fill those open gaps from last Wednesday's sell off. Those gaps are now filled and the Dow ended the day with a 90-point gain. The Nasdaq and Transports led on the upside while small caps and the I-fund also had good days.

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The rally off of last Thursday's low has been impressive but potentially exhaustive for stocks as the S&P is now testing the top of the recent open gap and the old highs. The bulls will need to put it into another gear to push past nearby resistance levels, otherwise the bears could be hovering to take control again.

The futures moved lower in evening trading, after an explosion at a concert in Manchester, England.  I don't have any further information at this time, but it sounds like it could be terrorism.


The SPY (S&P 500 / C-fund) filled its open gap after a big three day rally off the recent lows. It's do or die here for the bulls who have another chance at moving the SPY above 240 and the S&P 500 over 2400.




The DWCPF (S-fund) filled its gap as well with its impressive three-day rally. It is back above the 50-day EMA but still below the bear flag and some descending resistance.




The Dow Transportation Index was up almost one percent yesterday but you can see the trouble that lies ahead as it will try to fill that open gap, get above the bottom of the large bear flag, a descending resistance line, and the 50-day EMA. That's a big test coming up for the market leader.




The EFA (EAFE Index / I-fund) made another higher high but it lagged the U.S. stocks yesterday, only benefiting from some fair value adjustments and more weakness in the dollar. The dollar is probably due for some relief and that could put some short-term pressure on the I-fund compared to U.S. stocks.




The High Yield Corporate Bond Fund hit a new high yesterday, which "should" be a positive for stocks. When credit is easy to come by, stocks will benefit.




The AGG (Bonds / F-fund) drifted lower and may be creating a bull flag here, but those open gaps are still looming as potential pullback targets.




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

Tom Crowley


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