TSP Talk Blog

Stocks had a strong Thanksgiving week although the normally positive Wednesday and Friday saw just minor gains after Tuesday's big rally stole their thunder. Over those two days the Dow lost about 32-points, the S&P gained 3-points, and the Nasdaq picked up about 27-points. Small caps posted a small gain but it was the I-fund that led as the dollar took another dive.

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With Thanksgiving behind us, there can be a lull in the market the week after, and while we see some green on the November seasonality chart for today and tomorrow, that may have more to do with what day it is relative to the Thanksgiving weekend, so we'll see if the bulls are still in the buying mood. This week we may also get more information about the tax plan from the Senate, so it could be a market mover.


Chart courtesy of www.sentimentrader.com


The SPY (S&P 500 / C-fund) inched up on Friday but it was enough to make a new closing high. The 259 area looks crucial on this chart as any move below it would represent a failed breakout, and with that small open gap near 257, it's a possibility. But the bulls have been in charge and if the momentum for tax cuts can continue, they may stay in charge, although there's always the possibility of a "sell the news" reaction - whether it's good or bad news.




The DWCPF (small caps / S-fund) was a little choppy the day before and after Thanksgiving although it did close at a new high on Friday after breaking out on Tuesday. You can see that it has come a long way in a short period of time so a little digestion is not unhealthy. The 1310 area looks key here.




The Dow Transportation Index is at a critical point as it rallied Thanksgiving week but it is now up against the 50-day EMA and the top of a possible bear flag.




The EAFE Index (I-fund) made a new high on Friday and there are all kind of open gaps below on this one. There's some resistance at Friday's close but there is still some room on the upside in that large red parallel trading channel.




The dollar has been falling hard almost the entire month after failing at the 200-day EMA. This is a major reason why the I-fund is leading the TSP funds this year.




The AGG (Bonds / F-fund) was down on Friday after Wednesday's big rally. It is up against some short-term resistance (blue) but it did break above the longer-term descending trading channel (red) so that's an interesting positive development for bonds.




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Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


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