TSP Talk Blog

Although the Dow lost 14-points on Monday, it was a relatively good day for the indices with gains across the board, although internally there were more stocks down than up on the NYSE and Nasdaq. Small caps were flat on the day and bond yields rallied sharply pushing the Financial stocks higher.

Daily TSP Funds Return More returns

Those bond yields were spiking on rumors of a potential monetary change in Japan. Japans' interest rates have been very low for 25 years so this is a surprise, and while bond prices fell on this, surprisingly stocks didn't really react to it.

There were a slew of earnings reports released yesterday with Alphabet (aka Google) being the main attraction after the bell, and they easily beat estimates sending the stock higher in after hours trading, so there could be that breeze at the backs of the indices today. They were so good we can probably forget a sell the news reaction in GOOG - at least at the open today, but if it sends other stocks up in sympathy in early trading, we could see some profit taking later on.

On Thursday we get Amazon's earnings report and that could be the next market mover.

Also on Thursday we get the 2nd quarter GDP number and consensus estimates are looking for a 4.1% growth rate. Like the jobs report, it is a touchy number that, if better than expected, could ignite stocks, but if it's too hot, interest rate hike concerns will surface again, and that could send stocks lower.

---

The S&P 500 / C-fund has been holding up well despite trading near the top of a small and longer-term trading range. It is also in the F-flag (thanks Oscar Carboni) and the gap remains open down near 2765 as a potential breakdown target. But right now the bulls seem to have more influence so it may take a news event for the bears to show up again.




The small caps (S-fund) were flat and the slight dip away from the highs is a little surprising since the cup and handle is such a bullish pattern. Perhaps we will see a triple top? That's not common, but it can happen.




The Financials were the hot sector yesterday and was likely the reason that the S&P 500 was positive despite more stocks being down than up.




And it was the rally in bond yields that helped those Financials. Here's the 10-year Treasury Note yield popping up toward 3% again.




And of course when bond yields rise, bond prices fall so the AGG (Bonds / F-fund) was down on the day and finally looking to fill that open gap near 105.80. Technically it fell through some key support so it needs to rally back quickly or the chart will be broken again.




The EAFE Index (I-fund) was flat as it continues to struggle to move back above the 50-day EMA.




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.