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TSP Talk: New month. More gains. Head fake or another good month?

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Another big day for stocks after a 3-day consolidation. The Dow jumped another 185-points, that that was well off the highs, and while the rally resumed, advancing volume was less than twice that that of declining on the NYSE and the Nasdaq's volume was negative (more declining share volume than advancing), so the day wasn't quite as good as it looked.


Daily TSP Funds Return


I hate to do this to you but I had some folks in from out of town, and just when I came into the office to get the commentary done, the internet was down and I battled that for a while. It's back now, but since we saw more of the same yesterday, I'll make this quick today and give just a quick update. My apologies. I'll be back with more tomorrow. I'll leave Tuesday's commentary down below in case you missed it.

The S&P 500 jumped out of the gate on Tuesday, closed with very solid gains, but struggled a little to hold onto those morning highs and closed below that one resistance line that I've highlighted. The "F" flag in blue broke to the upside slightly, and that's a good sign because "F" flags tend to eventually break to the downside. There is a case that can be made that the "F" flag is actually a bull flag, which would be a more bullish formation, but the jury is still out on that one.




The indices are certainly stretched, but we're heading into a strong month for stocks. The first trading day or two in a new month can sometimes be head fakes. They do have a bullish bias because of new money coming into the market, but after a day or two we get to see which way the market really wants to go, and after November's monster rally, and the uncertainties that we've talked about recently, some profit taking wouldn't be hard to imagine in the coming days or weeks.

Small caps lagged for a second day. Nothing too concerning yet, but perhaps investors are looking more for bargains rather than chasing that hot Russell 2000 Index.

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

Tom Crowley



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