View RSS Feed

TSP Talk Blog

Trump grounds Boeing and stops S&P at key level

Rate this Entry
Stocks opened higher on Wednesday and quietly built on the gains until we had some big numbers and the S&P 500 was pushing above some serious resistance. That's about when President Trump announced the grounding of Boeing's 737 and we saw some selling and a pull back into the close. Still, the Dow was able to gain 148-points on the day and Boeing, which was down hard again after the announcement, rallied back to close slightly higher on the day.

Daily TSP Funds Return

The concern I have had over the last several weeks is the S&P 500's inability to get over the top of its recent range, and yet here it is again. It actually pushed above it yesterday before the Boeing announcement from Trump. Although it pulled back and closed below that resistance line, it did end up being the second highest closing price of the year for the index.




The market doesn't usually give us a lot of opportunities to sell at the top, yet the S&P 500 has been peaking near 2800 for 6 months. It makes me think there could be more upside, if only to suck in more folks before there is a decline. I'll go into more detail in the charts section below.

The British Parliament voted against a "no deal" on Brexit. The market does not want Britain to leave the EU. That's what I know. Whatever voting against a no deal means, must be a good thing. The Brits do love a good tabloid story, don't they?



The S&P 500 (C-fund) had a big day but stalled at some key levels. Not only is that 2815 area a tough nut to crack, but it is also back to the bottom old broken support line from that rising trading channel. A move higher from here would be impressive, but do stocks have it in them with those roadblocks in place? If it can break above that resistance, it could be a strong rally as many are sitting on the sidelines in cash waiting to see if it does break. That may be what happens, and as I mentioned above, it would suck in a lot of folks and end up bring the last hurrah for this rally.




The DWCPF (S-fund) may have had its false breakout last month and after it fell below those older highs, it not be as easy to get back above them. I'm looking at 1390 and 1415 as key levels that this index needs to move above.




The Dow Transportation Index was up 1% on the day, which was about half of the gains it had near the highs yesterday, and obviously negatively impacted by the Boeing news. There was a bit of a negative reversal created and it did stall right at the overhead descending resistance line. Funny how that happens on news days.




The EFA (I-fund) got some help from a very weak dollar yesterday and continues to rally off the 50-day EMA and pushing through the 200-day EMA earlier this week.




The High Yield Corporate Bond Fund made a new closing high, and as charts go, this one looks good. Taking a more macro view, the credit and debt markets are likely the biggest asset bubble right now. When it bursts, nobody knows, but stocks do like new highs here.




The AGG (F-fund) was down slightly but you can see it is still near its highs and may just need a pause here. With bonds up this week, it may not be the safety trade I thought it might be, but with yields so low, the stock market better hope this doesn't rollover. If yields start to rise (bond prices drop) we may see more profit taking in stocks while folks lock in higher yields. That just hasn't happened yet, however.




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. We'll see you back here tomorrow.

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.

Submit "Trump grounds Boeing and stops S&P at key level" to Digg Submit "Trump grounds Boeing and stops S&P at key level" to del.icio.us Submit "Trump grounds Boeing and stops S&P at key level" to StumbleUpon Submit "Trump grounds Boeing and stops S&P at key level" to Google

Comments


SPY (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

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

(Stockcharts.com Real-time)
AGG (F Fund) (delayed)

(Stockcharts.com Real-time)