TSP Talk Blog

Stocks closed down on the day yesterday with some late selling for the first time in a while. The Dow lost 177-points, which was about the lows of the day. The losses were modest (0.5% to 0.6%) but it's barely a blip on the radar compared to recent gains.

Daily TSP Funds Return More returns

Bond yields are still moving up (bond prices down) and the stocks market seems to have finally shown some concern about that, although we did see yields and bond prices reverse a bit by the end of the day. We've mentioned before that we saw yields moving higher in 2013 yet stocks did just fine, but there are some major gains over last few months and we may be seeing some profit taking with the ability to lock in some higher bond yields for a while.

Dismissing this market or thinking every down day for the market is the start of something nefarious has been a mistake for the last 4 or 5 months, or even since the November 2016 election. The S&P 500 had not been down 0.6% on a given day in 99 days before yesterday, and that's not a realistic pace, but I'm sure the bulls had their fun. The questions is whether that fun continues or not because the elusive 5.0% decline hasn't happened in over 400 days.

The dollar rebounded a bit but it has been hit so hard recently that it may just be temporary relief.

The Fed meets for the next couple of days and of course any leak could be a market mover. We're not expecting a rate hike today, but they could give some clarity on their plans for 2018 cuts.


The SPY (S&P 500 / C-fund) traded within its snug narrow rising trading channel again, but this time it closed near the lows for the first time all year. At this point it has to be a positive today or else this channel will be broken. That wouldn't be a major feat since this angle of incline is not sustainable.




The small caps / S-fund moved lower as well, losing about 0.8%, but it looks like we are seeing yet another bull flag forming. Each prior bull flag preceded another leg higher. Will it be different this time?




The Dow Transportation Index was down slightly after last week's selling, but it did create a negative reversal day when it closed at the lows.




The EAFE Index / I-fund was down modestly and for the first time in a while, it didn't get the help from a weak dollar.




The High Yield Corporate Bond Fund broke below a rising trading channel and is risking a lower high, and a new downtrend, if it can't rebound before testing the January low.




The AGG (bonds / F-fund) was down after breaking down from its bear flag, but it did try to crawl back as it closed off the lows and created a spinning top formation, which could be an indication of a reversal pattern.

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.