TSP Talk Blog

It was a big day for stocks despite a few news events that we might have thought would have sank the market. But no -- the Dow gained 256-points and we saw gains of close to, or more than, 1% in most of the major indices. The Nasdaq lagged with just a 0.49% gain.

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President Trump tweeted out that he doesn't see a deal being done with the Democrats to keep the government funded - they are too far apart on the issues. And the market rallied to new highs?

North Korea launched another missile into the Sea of Japan. After a brief midday dip, stocks rallied to new highs?

Perhaps the Bitcoin mania, which hit $10,000 a coin yesterday for the first time, was a bit contagious?

The key may have been the tax bill being passed by the Senate Finance Committee which is a crucial procedural step toward a vote by the full chamber later this week. Unfortunately it was a straight party line vote 12-11, so the country and D.C. remain very divided and cannot agree on anything. Getting through the full chamber may be a bit tougher as some Senate Republicans have been balking on the bill along with all of the Democrats.

I will be on the road most of today so I may not have time to write a full commentary for tomorrow. We'll see. Sorry for any inconvenience.


The SPY (S&P 500 / C-fund) rallied and pushed up to new highs again yesterday, this time reaching up toward the upper resistance line, which is rising. Volume was high and the momentum PMO indicator moved back above its moving average, which is a good sign but a possible sign over being overbought in the short-term.




The DWCPF (small caps / S-fund) also moved into new high territory with its 1.15% gain, leaving the gap open near 1310 which could have the bulls looking over their shoulders as an eventual pullback target. Both the S&P 500 and this small cap charts are well above their 20-day EMAs which can mean it is overly stretched. That doesn't mean they have to come down but a little consolidation is possible.




The Dow Transportation Index made a big bullish move pushing above its bear flag and the descending resistance line. Very interesting and a little surprising.




The EAFE Index (I-fund) lagged as the dollar rebounded on Tuesday.




The dollar looks to be trying to do a little cleaning house at it fills one of its two large open gaps it opened on the way down. It would be a surprise if it managed to fill the gap near 24.40 because it is above a couple of serious resistance levels.




The AGG (Bonds / F-fund) tried to breakout to the upside of its wedge-like pattern, but it failed and moved slightly lower by the close. We're watching for breakout clues to see which way this wants to go, but with the Fed still on an interest rate hike mission, it would be a surprise to see bonds moving higher (bond prices fall as yields go up.)




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

Tom Crowley


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