TSP Talk Blog

Monday was a bit of a snoozer as the indies were again mixed but mostly flat. The exception was the small caps where buyers were stepping up. The Dow lost 53-point and the S&P 500 was up a couple of points. The Transports caught a bid and is now testing its 200-day EMA, as you see in the charts section below.

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The bulls seemed to be a little fatigued but the bears had no desire to get too involved so it was more of a standoff - for the large caps, anyway.

The dollar rallied and made a new 52-week intraday and closing high yesterday, which again puts some pressure on the I-fund despite some big gains in the overseas markets yesterday.

I wish I had something more to talk about today, but it was just an uneventful day for stocks. The potential for another government shutdown at the end of the week got some airtime with some concerned for stocks, but during the last shutdown stocks rallied sharply so I don't think Wall Street cares too much.

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The S&P 500 / C-fund moved up early in the day on Monday, but it couldn't quite move high enough to fill that open gap before we saw some selling, but as I mentioned above, the bears don't seem to have the conviction to sell yet. The 200-day simple average is still overhead and acting as resistance, but it has been able to close above the 200-day EMA for several days now.




The DWCPF (small caps / S-fund) had a really nice day in comparison to the larger indices, and it too has remained above its 200-day EMA. But it is below the 200-day SMA (not shown) and there's a couple of more layers of resistance near in the 1360 area.




The Dow Transportation Index had a great day but it hit that 200-day EMA and stopped. How it reacts from here could be a good tell for the rest of the market. It's been a great rally off the lows like in most indices, but has it come too far too fast, is the question.




We saw some nice gains in many of the overseas markets yesterday but the dollar rallied again and the EFA (EAFE Index / I-fund) has a difficult time moving forward when that happens. The 50-day EMA has held so far, but if that dollar can breakout, it may be tough to continue to hold.




And here's that chart of the dollar showing the move to new highs. This may turn out to be a double top, and a good area for a pullback, especially with that big gap it opened yesterday, but we do have new rising trend here so the I-fund could remain under pressure and while that get gap filled - or I should say assuming it does, it may be a good time to lighten up on any I-fund holding you may have.




The AGG (Bonds / F-fund) was down yesterday but the trend is up and investors have not backed away from bonds despite the strength in stocks this year.




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

Tom Crowley


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