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Mixed day

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The market continues to produce mixed and choppy action as we saw decent gains in some indices, while others were down moderately. Yesterday the Dow lost 6-points after trading in positive territory for most of the day. The lagging Nasdaq Index gained a healthy 0.38% on the day (Nasdaq 100 was up 0.67%) while small caps posted a moderate loss on the day.

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The charts of the major indices are shaping up and are all trading back above the 50-day EMA's, plus they have recently successfully tested those EMAs and that's a good sign, but we'll want to keep an eye on that market leading Nasdaq 100 chart which may be in the process of forming another bear flag.

Yesterday was day two after a jobs report triggered rally so today or tomorrow may be the test. Often these upside jobs report rallies only last 2 or 3 days before we see some profit taking and possibly give those gains back.

The SPY (S&P 500 / C-fund) held 3 times at the 50-day EMA and yesterday's gains held it above the 20-day EMA for a second straight day. Again, we'll have to see if the jobs report rally can continue or if it was the 2 to 3 day phenomenon that we used to see. I mentioned in the TSP Talk Plus report yesterday that many tendencies like that used to work before interest rates were pinned near 0% for 8 years. Now that they are rising again, somewhat, will those old tendencies return?




The Nasdaq 100 was up strongly for a second straight day after being in a downtrend for the last 4 or 5 weeks. It moved back above the 50-day EMA and closed just below the 20-day EMA. This could be just another bear flag in which case the upside may be limited, but if it can make another meaningful move higher, preferably above 5800, we might be able to call the low in here.




The DWCPF (S-fund) lagged on Monday and continues to trade within that horizontal 5 week channel. The action over the last four days does look like a possible bear flag, so while the consolidation looks healthy, it needs to get past the bear flag.




The EFA (EAFE Index / I-fund) has so far successfully tested the 50-day EMA after breaking down from that wedge like formation.




The High Yield Corporate Bond was up again yesterday after last week's successful test of the 50-day EMA, but like many of the other charts, it is now in a possible bear flag.




The AGG (bonds / F-fund) was up slightly but still trading below the 50-day EMA and below most levels of support, so bonds have something to prove here as the chart has deteriorated.





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

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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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