TSP Talk Blog

We went into Thursday with a very nice bullish set up, but the market had other ideas. Instead of being off to new highs, the indices decided to test the Tuesday lows. So far they have successfully held, but it can get dicey near the 50-day EMAs, as you'll see in the charts. The Dow lost 560-points, while the Nasdaq and small caps were beaten down even worse. Bond yields keep rising, and rising quickly, which stirs things up.

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Turnaround Tuesday's reversal saw a big follow through to the upside on Wednesday, as the chartists would hope, but the day didn't start out positive. The negative open started to get bought within about 30 minutes into the trading day, and from there the bullish snowball grew. The Dow ended the day with a 435-point gain, and the major indices all picked up 1% or more on the day.

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The pullback in stocks continued on Tuesday, but a Turnaround Tuesday it was. After the opening bell was met with severe selling, we saw some buyers step up fairly quickly, and from there we got a steady move higher until about 10 minutes before the close when we did see some selling before the bell rang. The Dow and S&P 500 ended the day slightly higher - a huge reversal, while the Nasdaq and small caps continue to go their own way, and yesterday that was down.

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We are still seeing an interesting game of chasing the hot sectors / stocks, and running from the cold, and much of that is based on what we're seeing in bonds, which were pounded again as yields moved higher. The Dow managed to post a gain yesterday while the Nasdaq imploded and lost 2.5%. The S&P 500 was down sharply (-.77%), but those volatility small caps in our S-fund took a beating (-1.73%), yet the small caps of the Russell 2000 was down just 0.65%.

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There seems to be a lot of indecisiveness in the market recently with strong opens turning into weak closes, and weak openings turning into strong closes, while some indices do well, and others poorly, and it may be a change in character going on with higher oil prices and steepening yield curves. The Dow was flat on Friday, the S&P slipped late to close down on the day, and small caps reversed and rally big after a few days of selling.

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