TSP Talk Blog

Stocks sold off toward the end of the day on Tuesday to close modestly lower on the day. The Dow lost 59-points, or 0.22%, while the S&P 500 and Nasdaq both saw similar percentage losses. The I-fund was down sharply on a strong day for the dollar. Small caps held onto a slight gain while the Transports rallied sharply. Bonds also rallied.

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After the bell yesterday we saw some solid earnings reported by a few companies that lifted the futures, particularly the Nasdaq, when Microsoft and Facebook were bought up after-hours. That erased a chunk of Wednesday's loss in the Nasdaq.

One development in the last couple of days has been the dip in the yield on the 10-year Treasury while the 90-day yield has inched back up. The 10-year failed again at the 50-day EMA and the 90-day is back above it.




And of course that means that the yield curve on these is getting flatter (heading toward 0.00) and nearing another inversion as it pulled back from the 50-day EMA again. This kind of action spooked the stock market a bit in early March although it obviously quickly reversed - but is it starting again?

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The S&P 500 (C-fund) dipped yesterday giving back a fraction of Tuesday's big gains. The overhead resistance is holding, but rising so it can continue to move higher even if it can't break through that resistance, but there is more room on the downside within that trading channel.




The small caps (S-fund) led the TSP stock funds again, but that weak close created a possible negative reversal candlestick. That 1418 area looks like the support area to watch.




The dollar was up sharply but it did back off the highs after hitting a rising resistance line.




The strength in the dollar put a lot of pressure on the EFA (I-fund), which lagged the U.S. stocks by quite a bit. A gap as filled at the support line so it looks like a key level that must hold.




This is a more detailed repeat of the chart at the top, but the Yield on the 10-year Treasury fell again and is pulling back more from the 50-day EMA. It broke down from the short-term rising support line and nearly filled in the gap near 25.10 that we've been watch. It did open another small gap overhead and as always, it's a potential short-term target.




The AGG (Bonds / F-fund) was up nicely and it broke above that bull flag, and the top of that flag could now act as support, although there's an open gap still in the flag.




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

Tom Crowley


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