TSP Talk Blog

Stocks rallied sharply on Thursday as the Dow gained 217-points. Another big day but there was a little wobble toward the close as the Dow closed nearly 100-points off its high. I don't know if it's because of the possible new Ebola case that was reported, but Ebola sure seems to be in the middle of the recent volatility.

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The small caps led the way, the I-fund lagged with a 0.79% gain, and bonds were down.

The SPY (S&P 500 / C-fund) has continued higher at a very steep angle since last week's lows. Volatility is still high and the indices may need a little rest here. Will it consolidate, test the lows, or break down and make new lows, remains to be seen. But the indicators are getting oversold and one of those situations will likely play out in the short-term. SPY did close back above the 50-day EMA for the first time, but we got negative reversal kangaroo tails on many of the charts yesterday indicating some negative follow-through is very possible (and the futures are down as I write this.)


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk

The Wilshire 4500 (S-fund) is still testing the resistance of the 50 and 200-day EMA's, and there's some descending resistance just overhead as well. The rising support line is still intact, but like the S&P, it's a pretty sharp angle to sustain.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk

The Russell 2000 (small caps) looks very similar after its 1.79% gain on Thursday. Too much, to fast? Possibly. The market has been very strong but does it have enough strength left to lift these indices above the heavy resistance without some consolidation first?


Chart provided courtesy of www.stockcharts.comm, analysis by TSP Talk

The EFA (EAFE Index / I-fund) hasn't rallied as strongly as the U.S. indices. That's relative weakness, but perhaps some will look at it as the bargain area if the pass on U.S. stocks?


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk

The AGG (Bonds / F-fund) was down again as investors opted for stocks during yesterday market rally. I still think last week's high may mark an important long-term high for bonds, but there is some short-term support in the 110 area of this chart.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


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Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

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