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A day of rest

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Stocks were mixed, but mostly lower on Thursday as it digested the big gains from Wednesday. The Dow managed to push into positive territory at the close, ending the day with a gain of 11-points, and while the other indices did close off their lows, they still saw some modest losses on the day. The dollar closed higher pushing bonds and the I-fund lower.

Daily TSP Funds Return
The Fed's policy statement sent stocks lower in the afternoon, but there was some dip buying before the close. Overall the action seemed to be just a pause after a big rally for stocks. The S&P 500 has gained nearly 7% off the lows in just 7 days, so it could just need a breather, but it would have been better for the bulls to see some follow-through to Wednesday's rally.

Let's take a look at the post-2016 Election Rally. Day one after Election Day '16 we saw a big rally, similar to what we saw this week the day after the election. But in 2016, day #2 was up nicely, day #3 was up even bigger, and day #4 saw a small gain.




This year we got the day #1 rally, but day #2 has stalled already.




The situation is a lot different this time of course since we weren't electing a new president this year and there were no big surprises in the results. In 2016 Trump's victory was a total shock to many, and so the market had not priced in a Trump victory.

HOLIDAY CLOSING: From www.tsp.gov: "Some financial markets will be closed on Monday, November 12 in observance of the Veterans Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (November 12) will be processed Tuesday night (November 13), at Monday's closing share prices."



The S&P 500 / C-fund was down slightly on Thursday but it closed off the lows, and those lows did successfully test and hold at the 50-day EMA. It has now closed above the 200-day EMA for two straight days. As some of you know, we like to see 3 to 5 closes before calling it a breakout. The breakout in October only lasted 4 closes before it broke down again.




The DWCPF (S-fund) got the oversold bounce on the 50 day / 200-day EMA crossover. It's been a good bounce but it could get a little tougher now that it is off those oversold levels.




The EFA (EAFE Index / I-fund) lagged yesterday mainly because it was battling the rally in the dollar. It remains below some tough resistance with the bottom of that old trading channel now potentially acting as resistance.




The dollar was up about 0.6% yesterday, which just about filled that overhead gap near 25.80. It remains in a rising channel and that could keep some pressure on the I-fund.




The energy sector has been doing relatively well coming off the October lows, but it was doing it without the help of the price of oil which has been moving straight down since early October, inversely to the upward movement of the dollar. This is an interesting situation as it acts like a tax cut once gas prices catch up to the falling oil prices. If there were concerns of inflation this could add to it I suppose with consumers having more money in their pockets. It could be why bond yields are hitting new highs.




The yield on the 10-Year Treasury Note closed at its highest level since 2008 yesterday.




The AGG (bonds / F-fund) was down on those rising yields and it was down testing that double bottom just below 104 again.




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 holiday weekend, and a big thank you to all our troops and veterans, for your service!



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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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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Yahoo Finance Realtime TSP Fund Tracking Index Quotes