TSP Talk Blog

Stocks started the new week with a strong early push to the upside, but the rally quickly faded and the momentum turned negative. The indices closed somewhere near the lows of the day as the Dow, up 111-points at one point, closed with a gain of 15-points. The Nasdaq lagged losing 18-points or 0.3% and produced a failed breakout from the bear flag we've been watching.

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Small caps and International stocks held onto to modest gains, while the S&P was flat - up less than a point. It seems the summer doldrums are upon us. Earnings season is still a few weeks away so all eyes may turn to Washington for the next potential catalyst.

From www.tsp.gov:

TSP Withdrawal Options Bill

"Representatives Introduce TSP Withdrawal Options Bill — (June 26, 2017) On June 23, Rep. Elijah E. Cummings and Rep. Mark Meadows introduced a bill, H.R. 3031, to provide more flexibility on TSP participants’ withdrawal options. The bill would eliminate the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. It would also permit multiple post-separation withdrawals. Additionally, the bill would allow multiple age-based withdrawals while a participant is still working. Participants would also be able to stop monthly payments and elect to purchase an annuity while receiving monthly payments."
https://www.tsp.gov/whatsnew/Content/index.html#bill


The SPY (S&P 500 / C-fund) was pushing toward new highs to start the day on Monday but that quickly reversed. No real technical damage was done and the trend remains up, but beware of those rising "F" flag formations, which tend to negotiate their way to the down side.




The DWCPF (S-fund) had a decent day holding up better than its larger sibling, but possibly failing at a descending resistance line.




The Nasdaq 100 took the largest hit, although nothing terrible percent-wise, but the technical breakdown may be the worst development as it failed to hold onto its early breakout and it closed at the lows of the day, back in the flag with momentum back on the bears' side.




The Dow Transportation Index is having a difficult time moving above that 9500 level having backed down three times now. Still, it consolidated well since the the first test and as long as oil is struggling, we could see sustained interest in the Transport stocks, assuming the stock market in general doesn't roll over.




The EFA (EAFE Index / I-fund) was up slightly but like U.S. stocks, it closed well off the highs. The consolidation off the early June high continues.




A little follow-up from yesterday's analysis of the Chinese Shanghai Index... The 200-day EMA was broken with authority to the upside yesterday so, so much for that technical roadblock holding it up here. It's just one day so this isn't a confirmed breakout, but it's the first step to a more bullish move.




The AGG (Bonds / F-fund) was up again making a new 2017 high and remaining in that rising trading channel, but you can also see that support and resistance are converging near the apex of a rising wedge formation.




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

Tom Crowley


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