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Train kept'a roll'in

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Stocks and the bulls continue their exuberant run as the Dow gained another 201-points yesterday. The gains were broad with small caps and the Transports leading the way. Things are getting stretched but momentum is certainly on the side of the bulls and few seem willing to step in front of this runaway freight train.
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We get several earnings reports from financial institutions this morning (Friday) and that could either put the breaks on this rally, or confirm the recent strength and propel the indices even higher.

I've told this story before but it may have only been to our TSP Talk Plus subscribers, so my apologies if you've heard this before...

Back in the 90's we were only able to make one IFT per month, and we had to make any changes by the 15th of the month in order for it to take affect on the 1st of the following month, if you can imagine that.

Having the penchant for trying to time the market back then as well, although a lot greener at the time, I remember vividly being out of the market in mid-1998 and stocks were going straight up for a few weeks, after a big rally to start that year. I was waiting for a pullback to buy but the pain of missing out was getting tougher by the week. Finally, in mid-July at the 15th trading deadline, I capitulated and jumped into the C-fund for August. Almost immediately the market turned down and the C-fund lost over 14% that August. That one left a mark and perhaps that experience is why I have a very hard time buying into a rally. Patience is a virtue, but it can be painful.

Monday is a holiday the TSP offices won't be processing any transactions.

The SPY (S&P 500 / C-fund) moved to new highs again and since I have been doing this, tracking the S&P 500 in a spreadsheet, I have never seen the S&P accelerating above its 200-day EMA this fast for this long, and I'm going back 13 years.

The small caps / S-fund had a big day and moved above the top of its rising wedge. Rising wedges are not bullish patterns so this is an interesting situation if it does continue above the resistance line.

The Dow Transportation Index moved into a higher gear and above the narrower F-flag, which is an uncommon move. It is now testing the top of the parallel rising channel (red), which is a larger F-flag.

The High Yield Corporate Bond Fund did bounce back after Wednesday positive reversal. It filled that open gap and the last time it did that, it kept rallying. Of course back then it was rallying off of a fairly major decline.

The AGG (bonds / F-fund) moved higher yesterday as it rebounds off of its positive reversal day and the 200-day EMA. There is a small open gap near 108.95 that needs filling.

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. Have a great holiday weekend!

Tom Crowley

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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)
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)