TSP Talk Blog

If you looked at the close of the major indices yesterday you would be confused as to what type of day we had on Thursday. The Dow gained a respectable 70-points, the S&P was flat, and the Nasdaq was down moderately. Fine. Overall that's pretty mellow and flat. The problem is, the small caps and Transportation Index got pounded, and the number of stocks that were down far outweighed the number that were up on both the NYSE and the Nasdaq.

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I will make this quick today, because if you've been reading these commentaries, you know most of the concerns, and the market has been up and down on every headline.

There are some troubling signs out there that we have talked about - not only in the charts but with the Fed almost certainly raising rates on Wednesday next week, and the on again, off again trade war, But then we have the "Santa Claus Rally" starting at the end of next week. By that I mean the seasonality is historically very strong in the days just before Christmas through New Year's Eve, and even a couple of days into the New Year. So, there are some cross-currents and if you don't have a plan in place on how to play it, you'll have to make some decision on the fly with volatility making it tough to know which way the wind is blowing at any given moment.

Support was been holding well on the S&P 500 chart, but new lows in the small caps and Transports may be a warning sign.

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The S&P 500 / C-fund was flat but it closed well below the highs of the day, but also above the lows. We seem to have another bear flag forming, which tend to break down, but you can see we had a similar bear flag formation break to the upside in November. I believe that was Fed Chairman Powell's dovish remarks that triggered that one.




The action in DWCPF (S-fund) has been downright poor. It was the lowest close for the index all year.




The Transportation Index also fell apart and dropped below some key support that we've been watching - the October lows, and it made a new low for the year!




The High Yield Corporate Bond Fund actually had a decent day but it still closed below those key moving averages, so it wasn't too bullish.




The AGG (bonds /F-fund) was up slightly and the rocky action in stocks seems to be keeping the bond market in play despite what looks like it could be a double top.




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Thanks for reading. Have a great weekend!

Tom Crowley


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