TSP Talk Blog

The stock market was a bit rocky on Wednesday and the indices had a mind of their own as the Dow lost 219-points or 0.90% while the small caps were up - the Russell 2000 Index, and the S-fund was flat. The S&P 500, Nasdaq and Transportation index were all somewhere in between, but all of them faded from the late morning rally and highs of the day creating negative reversal bars on the charts.

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All eyes may now be on the situation in Syria, but at least that may take attention away from the Trade War theatrics for a little while.

With Mark Zuckerberg being grilled for hours over the last two days, you would think that Facebook was the only stock on the planet. The market seemed to shrug that off as Mark answered the questions without too much fanfare, but it was the release of the minutes from the FOMC meeting that seemed to put the most pressure on stocks yesterday as there was some concern from them about potentially needing to step up the interest rate hikes, and that also helped move bonds a bit higher.

Internally the market was a bit stronger than the losses in the Indices might indicate as the NYSE had 1400 individual stocks up on the day, versus 1194 down. That wasn't the case on the Nasdaq as it saw 12 decliners for every 10 gainers, but it only lost 0.36%, so the damage wasn't bad overall with about half the stocks closing in positive territory in total.

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The S&P 500 / C-fund is still in a worrisome bear flag but the angle of the recent low is encouraging to be a potential bottom. If that short-term support line off the lows, and / or the 200-day EMA, break , it will be a different story. We've seen a big rally off the April 2 low and a little digesting of the gains from Tuesday is not a deal breaker. Now it was a negative reversal day and that could mean more weakness at some point today, as you see on other part of the chart, but Monday's negative reversal (blue) was ignored and we got the big gains on Tuesday.




The small caps / S-fund keep trying to push above the 50-day EMA but failed yet again. This could be a concern, but support is rising and a resolution to this standoff may not be far off.




The Dow Transportation Index has a couple of bearish looking flags on it now and it continues to flirt with a 200-day EMA breakdown, which would not be good for the broader indices.




The EAFE Index / I-fund held above its recent resistance line but that open gap may want to get filled before it attempts to move higher, and of course the bottom of that gap needs to hold.




The High Yield Corporate Bond Fund had another slightly positive day, which is a plus, but it is up against some resistance.




The AGG (bonds / F-fund) was up slightly and the chart seems to be reaching for that 200-day average, which may be a tough nut to crack.




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

Tom Crowley


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