TSP Talk Blog

The bulls took charge again on Tuesday, although we did see a fade during the afternoon trading when the S&P 500 tested its prior highs. The Dow added 55-points - once again seeing an earlier 200+ point gain slip away. The Nasdaq surprised by leading on the upside, despite another rally in bond yields. The dollar continued its torrid pace higher and of course that put pressure on the I-fund again.

Daily TSP Funds Return More returns

A higher than expected gain in retail sales helped trigger a rally on Wall Street which may have confirmed that the consumers are still in a good mood, which is ironic because Consumer Sentiment report came in a lot lower than expected, and at a 10 year low, just a few days ago. I believe this has to do with the rise in inflation where consumers are not happy about that, but it's not stopping them from spending.

Internally, only the Nasdaq saw signs of bullishness as the NYSE saw more stocks and share volume down than up, despite the gains in the indices. The Nasdaq had 300+ more stocks down than up, but volume was positive because of the heavy trading in the large caps. It also saw 200+ new 52-week lows, which is odd on a day where it gained over 100-points.




The rally in the 10-year yield has hit a 4-day streak (with a day off in between) and this had been a concern for the growth sector but not yesterday as the gains in the Nasdaq told us. This rise in yields is of course pushing bond prices and the F-fund down near the recent lows.




The dollar continues to plow higher and it is nearly testing the high end of one of the rising channels (red) after breaking through another (blue dashed.) This looks similar to the move in June as the dollar was putting in a low back then, so perhaps another day or two of upside before we get a little (or more) pullback, but the trend remains up.




We'll be getting some housing data today plus some oil inventory numbers, and tomorrow the weekly jobless claims will be published. This type of data will impact bond yields and the dollar, which have been big catalysts for the TSP stocks and bond funds.

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The S&P 500 (C-fund) came of its solid gains yesterday after nearing the previous highs. Perhaps was a little profit taking from those who missed the last push above 4700. There's clear resistance in the area, so a pause is not a surprise, but you know the dip buyers will be close at hand as we get closer to Thanksgiving week. There's no guarantees that there will be gains during the holidays, but losses would be bucking the seasonal tendencies and the bears will be swimming against the current. The resistance lines are on their side at the moment, however.




Despite some lagging in the small caps of the Russell 2000, the DWCPF (S-fund) ran back up to Monday's highs, where they failed to hold [on Monday] and posted some solid gains. It still has a slight bear flag look to it, but it remains above all of the key support levels.




The EFA (I-fund) was down on the day and as we have been conveying, it's the dollar. When the dollar is moving up in chunks each day, those overseas stocks have trouble keeping up with the U.S. prices. So we're seeing a pullback after a failed attempt to test the previous highs.




BND (Bonds / F-fund) was down again, making it a very rough 5-day period for bonds and the F-fund as it flirts with the October lows. As I showed in the yield chart at the top of this commentary, there is some possible resistance for the 10-year yield, which could set up a relief rally here - if that resistance holds.

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

Tom Crowley

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