TSP Talk Blog

It was a mostly negative day for stocks on Friday but once again we saw them push closer to their highs by the close showing that the dip buyers are still very much alive. The Dow, which spent most of the day in negative territory, battled back to close with a gain of 34-points while the broader indices couldn't quite turn green.

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We didn't get any real upside follow-though from the nice reversal on Thursday, but that little washout did close some small gaps on the charts. So we have a battle this week where some gaps were satisfied on the downside, but the negative outside day on the Nasdaq may be a crack that is still in need of repair.

I am sorry but I have a couple more days of being off my normal schedule so again I may not be available to respond to emails right away, and the next couple commentaries may be brief. The Premium Service System signals will be posted in the premium area as needed, as usual. Sorry for any inconvenience and thanks for your patience.


The SPY (S&P 500 / C-fund) was down on Friday and after Thursday's close well above the lows it looks like it could be setting up a positive reversal, but we didn't get any positive follow-through so that is now suspect. The small open gap filled during Thursday's whippy day but we can still see that big old red open gap near 242.50, and if that can get filled it would also test the 50-day EMA. At that point - if it happens - we'll get a good idea on the next leg for the market. Will it breakdown from the rising trend or will it just be the next buying opportunity for the dip buyers?




The DWCPF (S-fund) had a couple of bad days last week starting with Wednesday's negative reversal and more pronounced selling on Thursday. On Friday it saw more modest losses while trying to hold onto the 20-day EMA. It is now back below that old rising resistance line, but still above that tough 1235 area that gave it trouble in June.




The Dow Transportation Index is the one that gives the most concern as it broke down pretty hard last week from that small bear flag and it may now be creating another bear flag. The 200-day EMA looks like a prime target for the downside, then the question will be whether it will hold, like it did in May, or break down.




The EFA (EAFE Index (I-fund) is still hovering near highs with the help of the falling dollar which closed at another multi-month low on Friday.




The AGG (Bonds / F-fund) started to bounce back from the sell off early last week, and it is reaching up to try to fill that open gap. This could be a bear flag, but if not, if it challenges the recent highs again, we could see a cup and handle breakout - it's tough to tell right now which would be more likely.




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

Tom Crowley


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