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Dow at record high while small caps a Transports fade

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It was a slow day for the market but the bears did manage to put a little pressure on stocks. The Dow, which gets the most of the attention, did close at a new high again after a 9-ppoint gain, but it was a different story for the broader indices outside of the S&P 500 as small caps and the Transports lagged again.
Daily TSP Funds Return

Some hiccups in the tax reform negotiations gave the small caps something to worry about, since they are most impacted by tax rates. The small caps of the Russell 2000 lost 1.3% on the day, while our S-fund, which is more of a small and mid-cap index, lost 0.8%.
The market leading Transportation Index fell below the 50-day EMA, which may be a problem, as you'll see in the charts below.

The market is open on Friday despite it being the observed day for Veteran's Day and a Federal holiday, and that means the TSP will be closed. From www.tsp.gov:

HOLIDAY CLOSING:
Some financial markets will be closed on Friday, November 10th in observance of the Veterans Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Friday night (November 10th) will be processed Monday night (November 13th), at Monday's closing share prices.


The SPY (S&P 500 / C-fund) made another new intraday high but it couldn't hold into the close. What can we say here but the trend is up although it looks stretched and in need of at least a modest pullback.




The DWCPF (small caps / S-fund) lost 0.8% on the day and it continues to get swatted down each time it attempts to make a new high over the early October peak.




The Dow Transportation Index fell below some key levels yesterday but unlike the decline last week, it closed below the 50-day EMA for the first time in over two months. The falling wedge, normally a fairly bullish formation, broke to the downside, but that was just one day and it may end up being a false alarm. Let's give it another couple of days before calling it a breakdown.




The EAFE (I-fund) continues to look good as yesterday's pullback did nothing but keep it in a bull flag in a rising trading channel.




The High Yield Corporate Bond Fund broke down below the 50-day EMA for the first time since August, and below other support making it a pretty significant move here, and potentially a warning sign for stocks.




The AGG (Bonds / F-fund) moved slightly higher again as it nears a little more resistance, but that overhead open gap is still there and could be a draw.




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.

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S&P 500 (C Fund)
S&P 500 INDEX,RTH (^GSPC)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)