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TSP Talk: Stocks mixed / mostly higher as earnings roll in

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Stocks were mixed on Wednesday, but mostly higher, on Wednesday with Nasdaq showing some weakness to avoid a sweep from the bulls. The Dow gained 152-points, with similar solid gains in the S&P 500, small caps, and I fund of around 0.4%. Bonds were down again as yields continue to creep higher, and that may have had something to do with the weakness in the tech-heavy Nasdaq. The dollar was down helping oil, natural gas, gold, silver, bitcoin, copper, etc., all move higher again on the day, keeping inflation concerns alive.


Daily TSP Funds Return
The F-flag in the 10-year yield continues to build. As we've talked about before, F-flags tend to break to the downside at some point, and generally with a thud. I don't know if that will be the case this time, because what could make yields suddenly move lower?




Well, as I posted yesterday, the GDPNow model estimate for real GDP growth in the third quarter of 2021 is 0.5%, down from 1.2% on October 15, and that after it was at 6.3% as recently as August - meaning the economy was basically at a standstill in the 3rd quarter rather than a robust gain of over 6% as was projected just two months ago. That's a big decline, and yields are near recent highs, as are stock prices, so are we in for a bit of a shock in these cases?


The dollar declined again, as this breakdown continues, although it is still above the 50-day EMA so it could be a temporary pullback, but commodity prices have certainly taken advantage recently.




I talked about watching silver as a clue for inflation. That may have been in a Plus report because I couldn't find when I said it but I believe it was just a few weeks ago - perhaps early October or in September. Anyway, we have seen a move higher in silver in recent weeks, and it just broke out above some major resistance. Is this a bottom for silver... I don't know, but that seems to be what is developing.




Gold used to be the go to vehicle for a hedge against inflation but you can see here that it isn't doing a whole lot except maybe coming off of recent lows as it remains below most resistance. But some analysts believe we have a new vehicle to replace gold as the hedge against inflation, and that is bitcoin.



And of course you probably know what bitcoin has been doing lately as it moved up more than 100% since the July low, and more than 50% in October alone.

Gasoline, heating oil, natural gas, housing, and food may be the keys for consumers. Right now the market is doing well and economists say it is because the consumer has money and they are spending. But as prices continue to rise, and supplies get cut because of supply chain issues, and / or production reduction in the case of energy, the consumer may start to run out of steam.

This could be temporary and fixed once the supply chain is back in working order and inflation cools, as some expect, and perhaps 2022 could be another big year, but until then the new highs in stocks may be a little too Pollyannish.





The S&P 500 (C-fund) gapped up for a fourth time in five trading days. Amazing, and here it is at the old highs. Everything would suggest that a pullback to fill those gaps is expected, but you know how things can go when everyone expects the same outcome? So, odds are it pulls back but it wouldn't surprise me one but if we got a major breakout to pull more people in, and then a pullback to clean up all, or some of the open gaps.




The DWCPF (S-fund) closed at an all time high although it did not reach the September 2nd intraday high. Again, a double top with a large open gap below looks like a no-brainer pullback opportunity, but it could be too obvious to actually work.



The year to date chart above show that the breakdown in late September / early October was a fake-out (blue circle) before the reversal started, and I suppose that could happen here on the top side as well.


The EFA (EAFE Index / I-fund) had a good day with the dollar dipping again. Technically there is some resistance at the descending resistance line and the top of the green open gap, which are both in the 85.75 area. Then there's three open gaps below (red) if that resistance does hold.




The BND (bonds / F-fund) was down yet again bonds near their recent lows.




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Tom Crowley


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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)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes