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TSP Talk: Huge positive reversal

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Stocks were getting clobbered early on Thursday but they bounced back fiercely to close well of their lows, and in the case of the small caps, into positive territory. The Dow lost 20-points, gaining back nearly all of a 300-point early loss. The Transports put in a second big day to closed at an all time high.

Daily TSP Funds Return


Sorry folks. I have to make this quick. I had a family emergency and spent most of the day yesterday in the hospital. Nothing overly serious. My wife went all Dak Prescott on us and broke her ankle badly. Just a head's up for Monday also, when she may be going in early for surgery, and I may not be available again.

Because of that, I missed a lot of the action, but the charts tell the story for me. We saw a nice positive reversal day and the indices may have put in another higher low as the dip buyers were back in business.

The VIX is still elevated and we may have to get used to these kind of days for a while longer, but once again, when the headlines look bad, it has been an opportunity to do some buying.



The S&P 500 (C-fund) broke down from the red rising trading channel badly on Thursday morning, but still managed to reverse strongly enough to close back above it yesterday. Quite the day. Another open gap was filled, and so far the bottom of that second gap has acted as support. The neckline of the inverted head and shoulders pattern was also a possible downside target, but it never got that far down.




Remember this chart from the other day?





The DWCPF (S-fund) closed with a solid gain after sinking sharply in early trading so that is a serious positive reversal. It too broke well below the rising support line before rallying back and actually closing at its 3rd highest level ever.




The Volatility Index shot up above 29 and the 200-day EMA during the morning sell off, but also reversed and closed back down below the average. The swings remain wide for stocks, but it seems to be under control as long as the VIX remains below that 200 EMA and also the 30 area.




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Thanks for reading. Have a great weekend!

Tom Crowley



Posted daily at www.tsptalk.com/comments.php

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S&P500 (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)

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Yahoo Finance Realtime TSP Fund Tracking Index Quotes