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TSP Talk: Very mixed day for TSP Funds to end July

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Stocks went on a wild ride on Friday, opening higher after those better than expected earnings reports from four of the FAANG companies after the bell on Thursday. Those early gains dwindled in early trading, but not for long as the buying resumed in the afternoon, and the indices skyrocketed into the close, closing at the highs of the day. The Dow gained 115-points, while the Nasdaq and S&P also added impressive gains, but it wasn't all blue skies as the small caps and I-fund lagged quite a bit with the dollar rallying.

Daily TSP Funds Return
One of the fears after the FAANG earnings reports was a possible sell the news reaction since these stocks have been rallying relentlessly since the March lows. But no such luck for the bears. The bulls kept the pressure on and, as you can see in the Nasdaq 100 chart below, it closed near its all-time highs. The chart below that is the Equal Weighted S&P 500 which shows how the rest of the market is just trying to keep pace with big tech, but continues to struggle to do so.




August isn't one of the better months for stocks historically, but it has its moments. Being the 3rd already today, we may not get the benefit of all three of those green bars to start the month, and the next several days are actually a bit shaky - going out as far as the 12th before we get a more positive stretch beginning on the 13th.


Chart provided courtesy of www.sentimentrader.com




The S&P 500 (C-fund) seems to be holding at the 20-day EMA, and on Friday it got another bounce off of it and ended up closing near the highs of the day, and it was actually the second highest close since February. The consolidation over the last 8-weeks could have given it the strength to finally breakout, but it will have to do so in the second worst month for stocks historically (September is worse.)




The weekly chart shows the S&P 500 made its highest weekly close since February, and the open gap should certainly have some luring qualities.




Despite the loss on Friday, the DWCPF (S-fund) closed above the June high for a 3rd straight day, which is a plus and almost a confirmation, but I would have liked to have seen that open gap get filled before it did finally breakout, otherwise we have to keep looking over our shoulders at that gap as a possible pullback target.




The EFA (I-fund) took a sharp hit on Friday and it needed the 200-day SMA and 50-day EMAs to hold it up. The strength in the dollar and early weakness in the U.S. stocks took their toll, but we could see a positive fair value added to today's price.




The dollar rallied on Friday for a rare positive day. There is a large open gap (blue) that could get filled but there is a lot of resistance at the top of that gap. It is certainly overdue for a relief rally, but the downside momentum is quite strong.




The Dow Transportation Index is flirting with that psychological 10,000 level again, after failing near there in June, but recently it has had an easy time breaking through other resistance.




BND (bond ETF) just continues to move higher and the yield on the 10-year Treasury Yield continues to slide lower. It doesn't seem to be a recipe for a strong economy, but the stocks market doesn't seem to mind.




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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.

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SPY (C Fund) (delayed)

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

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

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

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes