Large cap stocks were pushed to record highs at Thursday's open after the Chinese Commerce Ministry spokesmen remarked that the U.S. and China will cancel equal amounts of tariffs in the Phase One trade deal. The news was mostly priced in at the open and stocks stayed afloat in record high territory for most of the day. Prices faded late in the trading hours after the validity of these comments were questioned. There was a lack of confirmation from the Trump administration and a concern China was attempting to push the early deal in their favor. Nonetheless, the Dow and S&P 500 finished the day at record closing prices.
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Filling in for Tom Crowley...
Stocks were mixed on Wednesday with the Dow flat on the day and the S&P 500 up a couple, while most of the broader indices were down modestly with small caps lagging, but the charts did some repairing, filling in opens gaps on some of the charts.
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There was a late morning trade headline that sent stocks lower temporarily. Apparently the meeting between Trump and Xi could be delayed until December. There was a negative knee-jerk reaction but investors shook it off and the indices climbed back to where they were trading before the news.
It's been a quiet week so far, and that tends to mean stocks are doing fine, but of course there can be a calm before any storm, and while the action has been good, some of our indicators are telling us to be careful for a little while.
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Mondays is Veteran's Day and that is one of the Federal holidays where the TSP is closed and won't be processing transactions, but the stock market will be open. The bond market is also closed. I won't be posting market commentaries that day. And I'm not certain yet, but my wife and I will be on the road starting Thursday afternoon making Friday's commentary questionable. It may have to be a brief one.
The S&P 500 (C-fund) pulled back intraday on Wednesday after the trade headline, and that was enough to fill the open gap from Monday. It's quiet out there and the bulls are doing enough to keep the bears at bay. So far extreme overbought indicators have had no impact on the rally expect to stall it for a couple of days. Seasonality gets a more bearish after the holiday, so perhaps that it what the bears are waiting for.
The S-fund took a sharp hit on Wednesday, pulling back 0.42%, but also breaking below the rising rising wedge, which are bearish. There is a channel (red) that is still in the picture and could act as support near 1428.
The EFA (I-fund) was flat and remains in that narrow trading channel. There's support near 67.75, and then 66.00 near the prior highs. But it's hard to ignore that big open gap down at 64.50.
The price of copper rallied up to the 200-day EMA again this week, but failed again to hold above it. Looking at the prior failures shows that copper, and the S&P 500, did not do too well in the weeks following, so we'll keep an eye on this one for a while.
AGG (F-fund) had a good day, making its way back above the 50-day EMA, but it still remains below the rising support line. We're watching 112 as an important support level too.
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Thanks for reading. We'll see you back here tomorrow.