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Dip buyers grab Monday's weak open... again

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Stocks opened sharply lower on Monday but as has been the case for months now, the bulls swooped in and bought the dip and we saw mostly gains, albeit slight, into the close. The Dow gained 17-points and we continue to be in a market that refuses to sell-off with any authority, and any attempts at it are quickly reversed. Volatility is trying to creep in, but it can't hold.
Daily TSP Funds Return


Administrative Note: The TSP may have done an end around on us. last week before the holiday, they posted this on their website:

"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."

When processing Monday's share prices I see it was changed to this...



And they DID post prices for Friday (when they actually posted them, I don't know) but the change was minimal because of only small changes in the market.

Because we acted as if they were not processing Friday's prices, our AutoTracker will treat Friday as if it was a holiday, and Monday's share prices will include the action from Friday and Monday, as originally posted by the TSP.
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After going through, and easily surviving, the weakest historical seasonal stretch of the year in August, September, and October, the market is now closing in on the strongest seasonal stretch from pre-Thanksgiving through early January.

The world of near zero-interest rates and post-2016 election enthusiasm has made a mockery of the typical market cycles and pullback tendencies. One day it will end, but there have been no signs yet (externally) and as we head into the normally bullish holiday trading season the obvious question is whether it can keep up this amazing "non-bearish" pace.



The SPY (S&P 500 / C-fund) is holding tough at the 20-day EMA, an area it has not closed below since August, which is really incredible - and unusual. It's holding now and who knows how long it will continue to hold? There is a possible bear flag forming but it's insignificant on this chart. You can see it a little better on the small cap chart below.




The DWCPF (small caps / S-fund) fell through its 20-day EMA last week and is now holding firmly above its 50-day EMA after a successful test last week and again on Monday morning. You can see that small bear flag in red on the chart, but the 50-day EMA would have to break in order for that to play out, and in this market, that seems like a tall task, but we'll see.




The Dow Transportation Index saw its first positive day in a long time on Monday, although it was just a minor 0.18% gain. We drew in that blue dashed line a few weeks ago as a possible rounded top formation for the Transports and so far that has been the case. The 200-day EMA held the last time it was tested so that may be where this wants to head again. There's some support at yesterday's low and then there's also that small open gap near 9400 that could hold as support, but a 200-day EMA test would be a clean place to define this market.




The EAFE (I-fund) has dropped fairly sharply since last week's peak near 70, but you can tell by the white candlesticks that there have been buyers on the dips as the EFA has closed above its opening price every day during this dip. The 50-day EMA held back August and here it is testing it again, but some of the major I-fund holdings are seeing some trouble in their charts so it's a little sticky here. Greece's stock market looks to be in real trouble. Last time that happened we had a major debt crisis.




The High Yield Corporate Bond Fund has been crawling back slightly after the breakdown from that head and shoulders pattern last week. There's an open gap that may need filling but will it be able to come back like it did in August from a similar decline?




The AGG (Bonds / F-fund) rallied early as stocks struggled, but they reversed course, as stocks did, and closed flat into the close. It filled an open gap late last week (blue), and opened a new one (red) on the same day.




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)