TSP Talk Blog

The Dow was up nearly 200-points early on Wednesday but reversed course and was down over 100-points by early afternoon. The dip buyers were doing what they do, and bought the dip and the Dow closed the day up a respectable 43-points. The other indices bounced back as well but they couldn't move back into positive territory and we saw slight to sharply lower prices in many indices.

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Treasury Secretary Steven Mnuchin made a reference to the U.S. preferring a weaker dollar for trade purposes, and that seemed to shake things up a bit although nothing serious - except the dollar gapped down to a new 3 year low.

We're coming up on day #400 without a 5% correction, which is the longest stretch in 90 years. There's not really too many more ways to say it... the indices are stretched and arguably overbought, but momentum is on the bulls' side.


The SPY (S&P 500 / C-fund) nearly created a negative outside reversal day but it closed too far off the lows to qualify. Still, the outside day on high trading volume could be considered some kind of reversal pattern, but it's not as blatant as it would have been if we saw the S&P close at the lows of the day. The channel is narrow and rising sharply and it "shouldn't" last much longer, but it has already remained intact longer than most would have expected.




The small caps / S-fund took a moderate hit losing 0.44% yesterday. It ran into the top of yet another channel, but again, the resistance is also rising.




The Transports broke down from a small bear flag and rising channel yesterday, but found support at an old resistance line (blue).




The EAFE Index (I-fund) was up again - I sound like a broken record - but again it's the weakening dollar doing most of the work for it.




The dollar broke down after some comments by Steven Mnuchin on the new weak dollar policy from our government. That is something that may have been considered by many before, but never really announced like this. It does help the U.S. as far as trade goes, and it is good higher asset pricing, but potentially inflationary.




The AGG (bonds / F-fund) opened sharply lower but tried to crawl back by the end of the day. It's below its 200-day EMA but that open gap above the 200-EMA may still be a short-term lure.

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

Tom Crowley

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