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Another unusual October light volume snoozer

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Stocks opened higher on Tuesday but drifted lower for most of the morning before stabilizing and grinding higher into the close. The Dow gained 70-points on the day with modest to moderate gains in most indices. The share prices below include the action in the stock market on Monday, when the TSP was closed and stocks were down, so it's the total of the two days.

Daily TSP Funds Return

Volume was on the light side again, which isn't the norm this time of year, and the action has been relatively quiet in this normally volatile month.

The market is looking for the next catalysts after some weakness triggered by last week's weak jobs report. There are rumors about the tax plan falling through, continued hype over North Korea, and investors are positioning themselves for the upcoming earnings season. The talk of overvaluations based on trailing P/E's is giving the bears some hope, but as we have seen almost all year, it is tough to slow down a market with momentum.

The SPY (S&P 500 / C-fund) made a new high intraday on Tuesday but that 254.80 area continues to hold on a closing basis so the "flat top" may still be in play. Immediate support sits at the old resistance line, currently just above 253, and then in the 251.75 - 252.50 area. If the bears can take those out we'll start talking about the lower end of the rising trading channel, but that's a big IF at this point.

The DWCPF (S-fund) was up slightly but has been taking a breather near 1300 after the large rally off the 1190 area. There's some decent support just under 1300 but the recent sharp angle of incline may not be easy to maintain.

The Dow Transportation Index had a nice day yesterday but it gave back a lot of the early gains producing another negative reversal pattern. The rising support is holding, but like the small caps, the angle of incline will be tough to maintain much longer.

The EAFE Index (I-fund) was up sharply as stocks in Europe and Japan rallied, but also the dollar declined again helping the I-fund.

The dollar gapped down and lost 0.53% on the day and after the rally off the lows, it is trying to hold at the 20 and 50-day EMAs. Is the oversold relief rally over?

The AGG (Bonds / F-fund) was rallying strongly in early trading on Tuesday and moved convincingly above the 50-day EMA, but that rally faded toward the close after it hit some resistance and now we see a negative reversal formation while it tries to hang onto that 50-day EMA.

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:

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

Tom Crowley

Posted daily at

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.

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SPY (C Fund)
DWCPF (S Fund)
EFA (I Fund)
AGG (F Fund)