TSP Talk Blog

The bulls won the tug-o-war yesterday as they battled the bears pushing the S&P 500 above and below the break even point for most of the day before the bulls pulled out the win with a modest 10-point gain. The Dow fought off a 140-point early loss to close with a gain of 19-points but it was actually negative with less than a minute left in the day, so it was basically flat. The I fund lagged as the dollar rallied again. Bonds were up modestly.

Daily TSP Funds Return More returns

One of the main catalysts for stocks in recent weeks has been the pull back in the price of oil, and the decline in the yield of the 10-year Treasury, both of which the market finds favorable right now with inflation and the Fed rate hikes being the main concerns. And you can see there is a common divergence between those two and the S&P 500.



Oil was up over 2% on Thursday, but even though it looked a little perky, the oil bulls have some work to do to break the descending trend. The 10-year Yield has recently broken above some resistance, but it appears stuck in the old open gap from July. Those top two charts could determine if that trading channel on the S&P 500 is going to continue to hold.


The meme stocks got a little excited again in early August, but someone pulled the plug in the last few days as investors may be transitioning from a risk on, to more of a risk off approach. AMC, GME, and BBBY all popped early this month, but you can see what has happened in recent days to them, with both AMC and BBBY taking a hit after hours yesterday, so I had to manually add those changes into the daily charts.




The dollar seems to be gaining strength again. I've showed the comparison before that the stock market has done a lot better this year when the dollar was falling, but here it is breaking out to another possible move to the prior high again.




The bulls have been able to keep the momentum going and the 18% gain in the S&P 500 is certainly trying to suggest that the bear market is over, but that's not always the case as they can run longer than anyone expects. The index charts haven't really broken but we have seen a few that indicate that could be coming. The chart of the dollar, the 10-year yield, HYG, to name a few, and we'll see if the price of oil can stay below 95, otherwise that catalyst will be gone as well.

---

The S&P 500 (C-fund) is still hovering near recent highs so the bears are not having much of an impact on the bullish momentum, although it hasn't gone above Tuesday's high yet so technically it has stalled, but there's nothing wrong with that after the run that we have been witnessing the last couple of months. But it does matter that the 200-day moving average is holding because that is classic resistance in a bear market, and people are watching it.




The DWCPF (S-fund) had a good day after Wednesday' nasty sell off. It's finding some support at one old resistance line that was broken earlier this month, but that's not very firm. The 200-day EMA and the May highs have been holding it back this week, which again is typical bear market resistance. A break above the 1850 will get the attention of some bears who could be forced to make the switch if that happens, so let's see if the bears can keep this in the bear market by not allowing it to go any higher from here.




EFA (I-fund) was a victim of the dollar's strength yesterday as it lagged the U.S. stocks badly. The dollar looks strong right here and may be making a move to the old highs so the I-fund could have some roadblocks in the coming days.




BND (Bonds / F-fund) moved back above its 50-day EMA after spending a day below it. The rising channel is broken making this chart less attractive, but the bull flag is intact and the 50-day is holding. Today, that looks OK but they have to continue to hold.




Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php

For more info our other premium services, please go here... www.tsptalk.com/premiums.html

To get weekly or daily notifications when we post new commentary, sign up HERE.

Thanks for reading. I appreciate it. Have a great weekend!

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.