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4 up after 4 down

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Apple helped boost the Dow and technology stocks yesterday as it (Apple) bounced back from Wednesday's losses. The Dow rallied 147-points, or 0.57%, while the S&P had a similar percentage gain, small caps lagged with a small gain, and the Nasdaq led the charge with a 0.75% gain.

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The CPI (Consumer price Index) was up 0.02% last month, which was slightly lower than expectations, and that comes after a soft PPI on Wednesday so that eased inflationary concerns. Bonds were higher on that news and investors seemed to think it could keep the Fed from getting overly aggressive on interest rates -- for a day anyway.

We are seeing some warning signs out there but the charts do look pretty good again after the recent pullback found support at key levels leading to this week's rally. It doesn't take too much to turn a good chart into a bad one, but right now the bears have not shown that they have the fortitude to put any pressure on the downside.

Trade / tariffs are the main catalyst right now as we've seen the biggest moves, up or down, come after tariff related headlines. So traders are watching and they could change their tune if the news turns sour. So, if you're enjoying the gains right now, you may not want to get too complacent. Headlines and late September's negative seasonality could give traders a reason to change that tune.




The S&P 500 / C-fund rallied nicely as the rebound off the rising support continued yesterday. That's four consecutive positive days after four straight down days last week. The action looks good so if you just go by the charts, we're likely to see the old highs get tested. But there are signs of internal weakness still so there may be some fatigue hiding underneath this good looking chart.




The small caps (S-fund) made a higher high but they flattened out as the day went on and may have even created a negative reversal.




The weakness in small caps is something we saw in June, and I'm not saying this is how it will play out this time was well, but in June the negative divergence seemed to start around June 10 and you can see that small caps underperformed over the next 3+ weeks.




The EAFE (I-fund) was up nicely but like the small caps, faded and closed off the highs creating a possible negative reversal day here as well.




The Nasdaq was the big winner but it did run into a bit of resistance and closed off the highs.




The AGG (bonds) were up slightly trying to continue to bounce off the bottom of the rising channel, but there was some resistance at the old support line.




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. Have a great weekend!

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

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