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TSP Talk: Bulls take charge to start the week

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More gains to start the new week as the melt up continued. The Dow gained a modest 64-points while the broader indices saw more significant gains, although the I-fund had some pressure from a strong dollar. Bonds were up and yields pulled back from resistance. The small caps led the TSP funds again, and we'll take a closer look at this move in the TSP Fund chart section down below.


Daily TSP Funds Return
The Yield on the 10-year is playing the F-flag as we'd expect. F-flags do tend to break down, and we did get a false breakout to the upside late last week, but here it is again backing and filling the flag. If it does break down, and I'm only going by the chart formation, it could be the market reacting to the recent weaker economic data that has been released, namely a sinking GDP.





The dollar was up, but only enough to fill in the small open gap near 25.18. There is one open gap above, and three below on this chart, although there are more down below. It's not shown but there's a large open gap below 24.60 from June.




Internally the numbers were very strong with advancing issues and volume easily outpacing the declining.

Facebook reported some fair earnings after the bell yesterday, to start the big tech barrage this week. They were trading up about 2% in after hours trading, so no 'sell the news' reactions yet, although it was still trading when the earnings conference call started so there could still be some swings.

It's Tuesday and the question is whether this extended rally is running out of steam and we get a Turnaround Tuesday kind of day, or if the bulls are in pre-holiday mode already, and planning to ride the bull into the end of the year.




The S&P 500 (C-fund) busted through to new highs on Monday, rather than pulling back at the double top. Not that it can't do that now from this level, but the ease in which it went through that resistance yesterday is a little surprising. Four open gaps that the world can see, with most market timers anticipating them getting filled, is likely on delaying what I believe is the inevitable, which is to see some or all of them get filled. But knowing how the market likes to play with us, they will probably get filled when we have long given up on the possibility. It may just be too obvious right now to happen.




The DWCPF (S-fund) tagged the top of its trading channel with another big gain on Monday. It too has the incredibly obvious open gap, which will get filled, but when? Probably on Thanksgiving or Christmas Eve when we're all very bullish. Kidding, but that's seems to be the way this market has been going. There has been another obvious pattern on this chart in 2021...




We saw a parabolic move higher in early February of this year. If you missed the rally and were debating about whether to chase and buy into it...




Here's what happened next. The patient were rewarded this time.




Then, this volatile small caps index ramped straight up again. Surely we should be buying this one because it looks really serious and its' probably ready to break out to new highs...




Nope. Not this time. Another test of the lows. Should we buy here or is this going to break down?




Boom! Another blast in April, another pullback in May, but back up it goes yet again into June...




Rats! It turned out to be just another opportunity to sell high.




Uh, oh! Here's another rally in August. Is it going to finally break out this time? I believe I wrote back then that I thought this could be it.





Another sharp pullback, but at least the lows keep getting higher.




And here we are today after another rally up to resistance with the DWCPF (S-fund) making new highs again. It seems like a no-brainer that this should move back down again, no? Well, that's what they want us to think. :^)



What do you think? Did I mention there is only one open gap left on this chart?


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

Tom Crowley




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SPY (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