TSP Talk Blog

Both the bulls and the bears took shots at the indices yesterday, and by the bell both were left standing in basically a draw, but the bears may have landed a few more punches as we saw a little more red than green. The Dow lost 55-points while the S&P 500 and small caps were flat. Bonds were flat as well. The Nasdaq lagged with a modest loss.

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The internals were mostly negative as the market digested Friday's late rally, but mostly hung onto those gains without following trough with more upside.



I keep waiting for the shoe to drop in the price of oil but it has stubbornly clung to its bear flag after yesterday's small rally, which actually pushed it back above its 50-day EMA. These are not bullish formations, however.




The banks start reporting their 1st quarter earnings this week and rising yields over the last quarter likely helped them, but as we talked about before, there is some concern about failing client's funds that may show up negatively in their balance sheets. Just as an FYI - they reported during the middle of January, marked down below.

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The S&P 500 (C-fund) closed above its negative opening and the lows of the day to tick closer to the top of that large rising trading channel (blue.) I'm not saying stocks will go down, but the set up is certainly there for a possible pullback with that open gap, and a lot of open air, below in both of those rising channels. can it continue to rise below that rising resistance line? Absolutely, we've seen it before, but the risk reward gets higher with each tick higher.




The DWCPF (small caps / S-fund) was flat but it rallied back from some more meaningful earlier losses. There is a possible bull flag in that large descending channel that, if it breaks out, could easily test 2200. There's also an open gap down near 2100 that may need to get filled.




The EFA (I-Fund) fell back below that rising channel (blue dashed line) once again, but the larger trend remains up. Short-term, there's a lot of room on both sides so there could be some wide swings within the channels if volatility picks up.




The Dow Transportation Index made another new high and remains in that tight rising trading channel, that may not be sustainable for too much longer as it moves into its 3rd month.




BND (bonds / F-fund) were mostly flat and remain in the bear flag that has been grinding out for about 5 weeks now.




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

Tom Crowley



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