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Greece defaults, futures up?

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Stocks opened higher on Tuesday but the gains did not stick very long. The Dow, which was up over 100-points twice during the day, ended the day up 23-points. The midday spike was some Fed comments on interest rates, but the situation with Greece up against its deadline and investors sold into the close.


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As I write this Tuesday night, Greece missed it's IMF payment deadline and is officially in default, so now we'll see how the markets react. The futures are actually slightly higher despite this news. Then there's Puerto Rico's debt issue.

There's also a concern from the head of the FBI over potential terror attacks during the 4th of July weekend. The market doesn't ever seem to do the obvious, but logic might tell us that investors might be reluctant to buy going into the 3-day weekend. But the market does not always act logically.

The June Jobs report will be released on Thursday this week because of the holiday on Friday. Estimates are looking for a gain of 230,000 jobs, and an unemployment rate of 5.4%. The Jobs Report Contest is open in the forum. Click here for more information.

The SPY (S&P500 / C-fund) bounced early but closed with just modest gains to end the 2nd quarter. The old support line that was broken on Monday, could now act as resistance, but with this headline driven market the support and resistance line may not matter too much. And that's a lot for me to say because I am a big believer that the charts tell the story and often have the news already in them.


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


The Dow Completion Index (S-fund) gained a respectable 0.5%
on Tuesday, but that was just a fraction of the 2.3% loss it took on Monday. It's a start but could just be a temporary relief rally. It remains above the support line but below the 50-day EMA for a second day.


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


The
Dow Transportation Index was having a good day, but being in a bear market and breaking down from a bear flag, it's not a surprise to see the early gains fade away and post a negative reversal day.


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


The
EFA (EAFE index / I-fund) was down again closing below the 200-day EMA for a second straight day. The open gaps are above, but the situation overseas seems to have more of a hold on this index than the lure of the gaps. Eventually they will get filled, but who knows when?


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


China's Shanghai Index shot up 5.5% on Tuesday as the volatility continues. We know that some of the biggest daily rallies that we get in stocks are snap-back rallies in a bear market after sharp declines. So far that may be what we are seeing in China, but I'm watching resistance lines for signs that the correction is over. China isn't in our I-fund but if it stays depressed the U.S. markets will begin to react.


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


The AGG (bonds / F-fund) was down slightly and it is up against some stiff resistance. Bear flags, the 200-day EMA, and descending trend lines are piling up near 109.


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


From www.tsp.gov: Some financial markets will be closed on Friday, July 3rd in observance of the Independence Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Friday night (July 3rd) will be processed Monday night (July 6th), at Monday's closing share prices.

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.

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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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