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Investors complacent in front of busy news week

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Yesterday felt like a calm before the storm. Trading was light and the bulls seemed fully in charge, but a late pullback pushed the indices to a mostly flat close although all of the major indices ended with gains, some barely. The Dow gained 6-points, while the Transports led with a 1% gain, and the I-fund may have been helped by the early closes abroad.

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As mentioned yesterday, this week is a busy one and by the time you read this the summit with North Korea may have already ended.

It seems hopes are high but there is obvious skepticism, although the market was not showing too many signs of concern, except maybe in those last few minutes of trading yesterday. Perhaps the recent compliancy may be the real warning.

A tariff agreement deadline is scheduled for the 15th and this is far from over, but again the market is not showing any worries about it yet.

The Fed meets today and Wednesday for their FOMC meeting and most are expecting the announcement of another interest rate hike tomorrow. Any surprises would come from changes in monetary policy since the rate while is all but certain.

The ECB and Bank of Japan also have meetings this week, and the European meeting is going to get some attention as their economic concerns have been on display recently.

Reminder: I'm going to be in and out of the office over the next couple of weeks [starting 6/7], doing some traveling. I will be checking emails and posting premium alerts as usual, and I will posting something here everyday, but it may be quick updates and my time-frames may be off a little.

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The S&P 500 / C-fund was up modestly for most of the day before a late sell-off, which seemed reasonable considering the U.S. / North Korean Summit last night. Technically the negative reversal could be an issue as resistance from some wedges may put up temporary road-blocks.

The EAFE Index (EFA) had a decent day but again the late selling in U.S. stocks may not have been considered here. There is a large open gap near 71.50, and it remains in a long trading channel between 68 and 72.

The Volatility Index was up slightly but surprising it is still fairly low as investors remain relatively complacent in front of this week's big news cycle. It wouldn't surprise me to see this back up to test the 200-day EMA some point this week.

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:

Thanks for reading, and thanks for your patience over the next couple of weeks while I'm out and about. We'll see you tomorrow.

Tom Crowley

Posted daily at

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