TSP Talk Blog

It was yet another whippy day for stocks but the range stayed about the same as investor bought the dips, but sold the rips, particularly after the Fed meeting minutes were released yesterday. But by the close the bulls had the advantage, although the action on the charts still shows a tough battle. The Dow, up 133-points, lagged percentage-wise as a 4.5% loss in Microsoft was a big drag. The broader market indices showed more relative strength and the weakness in the dollar kept the I-fund hot. Bonds were up again as yields slipped.

Daily TSP Funds Return More returns

The market got shaken up a bit at 2 PM after the release of the December FOMC meeting minutes as the Fed reiterated their hawkish outlook cautioning against loosening monetary policy too prematurely.
Fed officials see higher rates for ‘some time’ ahead

“Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time,” the meeting summary stated. “In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy.” -- https://www.cnbc.com/2023/01/04/fed-minutes-december-2022-.html

Yields moved off their lows on those released comments that were made in mid-December, but they remained down on the day, as did the dollar, and both of those being down are currently favorable to the stock market.




Despite the swings, internally the action was actually really good. More than 4 to 1 advancing issues than decliners on the NYSE, and advancing volume on the Nasdaq also outpaced the decliners by 4 to 1. We also saw more new highs than lows on both the NYSE and Nasdaq, which we haven't seen lately.




It's getting late in the game and the holiday / new year activity should be waning, and the indices really haven't done a whole lot. As we look at the TSP fund charts down below however, we are starting to see a slight change that may get the bears a little nervous -- and there are a lot of bears out there.

My short-term view is not the same as my longer term view, but as always I am trying to be nimble and go where the opportunities seem to be. Despite the bear I am willing to buy deep negative sentiment, oversold declines, and areas of support, but if I am in stocks I am also just as eager to sell into resistance and overbought relief rallies. However, with the indices moving sideways for the last two and a half weeks, many indicators are off their extremes and you can feel the uncertainty in the air. Place your bets!

2023 Guess the Dow Contest anyone? More

felixthecat from our forum won the 2022 version by guessing 33,872, which was 725 points off the close last Friday of 33,147.

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The S&P 500 (C-fund) has created a large bearish looking flag, but if we pull back a little and squint our eyes, there is a hint of a rounded bottom forming. There is still a ton of resistance overhead, but knowing how the big money loves to get us small guys leaning on the wrong side, a push up to those resistance areas wouldn't be a big surprise. The safe thing to do is to wait for confirmation of a breakout before being a buyer, but a move up to 3900, 3960 and 4000 is possible in this bearish market, and an aggressive play. From there, however, it would get tougher.




The DWCPF (S-fund) had a big day and here too we can see the rounded bottom look. It's back above some old support that it fell through in December and actually closed at its highest level since before Christmas.




The EFA / I-fund continues to climb and yesterday it checked another box by filling in that open gap from a few weeks ago. The top of that gap could now act as resistance, but 68 or a test of the recent high near 69 is certainly possible.




BND / F-fund had another good day so it looks like the pull back is over as it made its way back above the 50-day EMA and the descending resistance line. Granted it has only gone up enough to fill a couple of previously opened gaps, and that could have been the best it can do, but otherwise the chart is looking a little better.




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

Tom Crowley



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