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Another bounce back

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After Monday's Tariff Tantrum that produced a large intraday negative reversal, stocks battled back on Tuesday regaining all of the late Monday losses, and added a bit more. The Dow gained 429-points with a push higher at the open after overnight comments from the Chinese President Xi Jinping that eased investors' trade concerns.
Daily TSP Funds Return


The volatility and recent trading range has been nothing like we have seen in a few years. Remember when it was a year between 1% moves for the S&P 500, and multiple years between 5% pullbacks, not to mention any 10% corrections for longer than history would suggest? Well those days are gone and we continue to see 1% and 2% daily moves regularly.

Of course that can be scary, but it also gives us opportunities, especially for those who are able to move quickly and often, but unfortunately in our TSP accounts we can basically buy once each month, or maybe twice if done incrementally. So, we're going to have good days and bad days in our accounts with these large swings, but I have a feeling that the lows are being established, if they have not already done so in the last few days.

That doesn't mean volatility is over, and that's a good thing because volatility does mean more opportunities, unlike the post 2016 election where buyers were given few opportunities to buy dips and it was the buy and holders who were the winners. Volatility can also mean trouble if you're on the wrong end of the moves, so you still have to time things well.




The S&P 500 / C-fund saw a solid gain on Tuesday and the possibility of the "V" bottom remain viable, but the bear flags are still there and present some potential trouble. So, how strong is this recent rally where the S&P has closed higher in 5 of the last 6 trading days? We may soon enough.




The small caps / S-fund had a big day but the rally hit some resistance at the top of the bear flag and the 50-day EMA. That makes today's action quite important as we may know if we're heading back to the bottom of the flag, or if it's ready to breakout.




The EAFE Index / I-fund didn't make as big of move as the U.S. indices, but it broke above some key resistance levels, none the less.




The Dollar was down again and continues to slip from the April high last week, and now it is back below the 50-day EMA after failing to make a higher high.




The weak dollar also helped commodities and a couple that tend to be good gauges of the strength of the economy, oil and copper, both surged higher on the day, with copper breaking above some key resistance, while oil is in the midst of a bullish cup and handle formation.




The AGG (bonds / F-fund) dipped a bit and remains in a bull flag, and above some key support levels for now.





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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SPY (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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AGG (F Fund) (delayed)

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