TSP Talk Blog

It was quite a wild ride yesterday on Wall Street with a giant opening bell rally failing almost immediately, regaining strength to test the early highs, then a fade into the afternoon trading with the indices closing at their lows. The Dow, up 937-points at the highs, closed down 26-points. That's quite a round trip for a day.

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I don't want to pretend that I have this figured out, but if you look at the charts you'll see that this action was certainly within the realm of possibility. It's just that the moves are so big. An explosive rally in a bear market is not a surprise. Neither is it failing. But while it is playing out it is a major chaotic event. The bears were in trouble while the bulls went into a mini-euphoric stage with yesterday starting out with a 3.5% rally early, which followed Monday's giant 7% rally. Then the breaks were put on and Tuesday's gains were gone and investor sentiment did a 180.

The charts show some possible big bear flags still forming but the bears, after having a day and a half of misery, may be a little gun shy. The bulls may be in the same position, so the action could get interesting over the next few days as we head into the long three day Easter weekend. It's not a Federal holiday but the stock market is closed on Friday.

I am pretty burned out myself so two more days this week is about all I can take. I won't be posting a commentary on Friday.

From www.tsp.gov: Some financial markets will be closed on Friday, April 10 in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (April 10) will be processed Monday night (April 13), at Monday's closing share prices.

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The S&P 500 (C-fund) rallied out of the gate in the morning adding onto Monday's tremendous gains. By about lunchtime in the east, the FOMO buying dried up and the bears saw an opportunity. The indices held onto most of Monday's gains but all of the 3.5% morning gains in the S&P 500 were gone by the close. It looks like a bear flag to me and those two open gaps below are still in play.




The DWCPF (S-fund) managed to hold onto a modest gain but it too closed well off the highs and produced a negative outside reversal day. Open gaps below and some overhead resistance could prove troublesome during the rest of the short holiday week.




The Dow Transportation Index is also in what appears to be a large bear flag, and bear flags are of course... generally bearish. A test down to the bottom of the flag near 7500 looks very possible, and the question will be whether it will breakdown, as bear flags tend to do.




The price of oil was down again and it has now given up more than half of its gains from that huge 2-day rally last week. The 20-day EMA is holding as resistance.




The VIX was up for the first time in a few days and it did find some support at the support lines that we have been drawing.




The AGG chart and quote hasn't been the best representation of the F-fund recently so I am going to go with this BND bond ETF to see if the F-fund follows it more closely. Bonds have been flat after the recent tremendous rally off the lows, so they seem to be consolidating.




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

Tom Crowley


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