TSP Talk Blog

After a weak open, stocks moved solidly higher again on Monday as the relentless rally continues to roll along. The Dow opened about 70-points to the downside to start the week but it closed with another flurry and a gain of 143-points, while the Nasdaq tacked on another 1% gain. New highs in major indices have become a daily event as the melt-up continues.

Daily TSP Funds Return More returns

So, is it the action in Washington causing the market to continue higher, or is something changing? We know the tax cuts were eagerly anticipated and the market was not only buying the rumor, it eventually bought the news as well. Since then it has continued to buy every announcement, whether corporate or government related.

A potential government shutdown resulted in a rally on Friday. An actual shutdown resulted in small loss on Monday morning, but that didn't last long. The announcement of a possible temporary deal to get the government back open sent stocks rallying into the close again and as I write this, that temporary deal looks inevitable.

What could derail this market? It will probably be something unexpected, so obviously it would be tough to prepare for. There is an FOMC meeting next week and with the economy showing definite signs of growth, I suppose they could raise rates 0.50% instead of the anticipated 0.25% and that could throw a wrench into things, but their more recent history has been to be as accommodating as possible to the markets, even when they are raising rates.


The SPY (S&P 500 / C-fund) didn't blink when the market opened while the government shutdown. The narrow rising trading channel keeps humming along. It's just a matter of time before this channel breaks because the angle of incline is probably not not sustainable for too much longer, and there's support at the old resistance line, near 276.




The small caps / S-fund moved to the top of its rising channel so there is room on the downside, but support and resistance are still rising.




The EAFE Index (I-fund) continues to defy gravity as the dollar is feeling the weight of that gravity. The dollar was down 0.34% giving the I-fund that extra boost.




The High Yield Corporate Bond Fund was up on the day but remains below some important resistance lines.




The AGG (bonds / F-fund) tried to rally at the open with the government on shutdown, but the proposed deal to fund the government for a few more weeks sent it lower again.

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

Tom Crowley

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