TSP Talk Blog

While most of the market struggled on Wednesday, the "FANG" stocks decided to buck the trend and bounce back from Tuesday's sell-off. So while the Nasdaq rallied 0.74% on the day, the Dow (-57), the S&P (-1.42), Transports, small caps, and the international stocks, were all down on the day.

Daily TSP Funds Return More returns

The stocks of FANG, (Facebook, Amazon / Apple, Netflix, and Google) all had big days, just as the chart was suggesting a possible breakdown, but like yesterday's commentary, the QQQ chart is not out of the woods yet as it remains in a bear flag with an open gap in the middle of that flag. Perhaps it was a fake-out that gets investors leaning the wrong way? Otherwise, that double bottom at the 50-day EMA may be the lows for this pullback. A move above 141+ might confirm that.




The SPY (S&P 500 / C-fund) remains in an F-flag formation, which is trending higher. It's just two days removed from an all-time new high, but the action over the last two days can be considered a failed breakout. The trading has been slow with light volume as the market looks for its next catalyst.




The price of oil moved down again to new multi-month lows at about 42.50, and that continues to pull down the energy sector, which also posted new lows. This put some pressure on the larger indices and is one of the reasons why the tech heavy Nasdaq was able to outperform. Investors are getting very negative on energy so perhaps it's getting a little overdone on the downside.




The DWCPF (S-fund) opened higher and was having a decent day until things started to go sour about an hour into the trading day. There is some support at yesterday's lows, and then comes the 50-day EMA.




The EFA (EAFE Index / I-fund) was off slightly and continues to drift sideways since breaking down from that rising trading channel.





The short-term indicators are neutral to now modestly oversold, and that's just 2 days since the all-time new high was hit. A strong market could rally from slightly oversold conditions, so we have a bit of a test coming here between oversold conditions and the negative divergence we've watched develop.





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.