TSP Talk Blog

Stocks were mixed again on Wednesday, and almost a flip flop from Tuesday's action. We are seeing a shift back and forth between growth and value stocks outperforming, and with COVID cases rising again, yesterday was one of the "shutdown" days where the stocks that do better during an economic shutdown, like Netflix and Zoom, outperformed. The Dow lost 23-points while the S&P and Nasdaq had strong gains.

Yesterday was one of those holidays where the market was up and running, but the TSP was closed. That means the TSP share prices and returns below are from Tuesday's market action. Thursday's share prices will include the action from both Wednesday and Thursday.

Daily TSP Funds Return More returns

Recently the back and forth shift in strength between large and small caps has been profound, and in my personal trading it seems like I have been on the flip side of the coin that's been coming up lately. It may be a time where splitting your allocation, rather than holding one fund, may be a better play. The interesting thing lately is that the S-fund in (DWCPF) isn't following the small caps of the Russell 2000 very closely. Yesterday the Russell was flat and DWCPF was up 0.86%. Anybody in the S-fund will take that.

Yesterday the S&P 500 gained an impressive 0.77% while those same stocks in the equal Weighted Index lost 0.18%, and once again it was big tech leading that made the difference.

Just looking at the main indices it looked like a good day for stocks, but the internals told a different story - at least on the NYSE share volume. The Nasdaq was much more bullish.




As well as stocks have done, and many indices are just off all time highs, the uncertainty going forward seems higher than the market would be indicating. Yes, we have low interest rates and an inevitable stimulus package being dangled in front of us - yet not quite in reach, and those are good reasons to be in stocks. The media has us believing that the presidential election is final, but there is some uncertainty there as they do recounts and look into possible irregularities. If nothing else, it is delaying what most believe is a done deal. Will the market react to this? Again, the market may not care about who wins the presidential election, but not all of the Senate races have been officially called yet either and the balance of power there may still impact the market.

And the more vexing issue now is that rise in COVID cases. Is that a real problem, or was it just a distraction over the last 10 months? Should stocks be at all time highs with the virus spreading as fast as ever? I don't know.

That's a lot to deal with and with so much up in the air, will investors start getting cranky again, or are they just looking for opportunities to buy?

The bond market was closed yesterday for the holiday but the action in ETFs showed some gains for bond prices while yields slipped on the negative economic play going on right now because of the recent COVID numbers.

---

The S&P 500 (C-fund) was down slightly on Tuesday and rebounded strongly on Wednesday. The question is whether Wednesday was more like holiday trading day, although volume wasn't that low. Monday's reversal is still very much in play and can impact trading for the next few weeks. The positive reversal on the 21st of September did come back down, get tested, and held again. I point that out because we could see a move back up to Mondays high, but it could fail there again.




The DWCPF (S-fund) had a good day despite the Russell 2000 small caps index struggling on the day. It is in a rising trading channel, but there is some resistance just overhead.




The Dow Transportation Index was down yesterday as the more economically sensitive sectors were big laggards yesterday.




The I-fund is leading the way in November with the dollar taking a nose dive this month. This is the hot fund, but with all of those open gaps below, it would be tough to try to jump onboard now.




The Nasdaq made a new high on Monday before reversing sharply lower on the day, then was slammed again on Tuesday but came roaring back with a 2% gain yesterday. If you look at this chart you can see that every gap that was opened has been filled (blue), all except for one (red.) The one down near 11,200. Just saying.




BND (F-fund) was up yesterday but again, the bond market was actually closed on the day. It is trading back in the descending trading channel.




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

For more info our other premium services, please go here... www.tsptalk.com/premiums.html

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