Stocks opened sharply lower on Tuesday, but in true Turnaround-Tuesday form, they rebounded strongly with some indices posting big gains by the close. The Dow lost 51-points but the S&P ended basically flat, and the Nasdaq and small caps closed with very solid gains.
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The I-fund was once again a bit behind. When the European markets were closing, the U.S. indices were just about bottoming, so we could see some help for the I-fund today, but technically, the I-fund chart is getting weaker. Bonds were up.
The SPY (S&P 500 / C-fund) was down slightly but what a day it had. The S&P 500 was down over 20-points at the lows (more than 1%), and ended up recovering almost all of it. Positive reversal days like that tend to bring at least short-term follow through to the upside, but I see this recent volatility as a bit of a warning sign that the bears are getting involved again. The current action looks a little familiar to the September peak's action.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) had a big day coming from early big losses to very solid gains, but it remains below some key resistance. The bullish angle is that the support line we've been watching (red dashed) was broken and recaptured very quickly.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Russell 2000 (small caps) hasn't made new highs but it has been consolidating nicely for about six weeks now. This is either a calm before a breakout, or it could end up being a peak if the bulls don't act soon.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) reversed off their worst levels yesterday, but this was day two in our count of closes below the 50-day EMA and short-term rising support line (brown.)
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was up yesterday but had a bit of a negative reversal day in counter sympathy with stocks. The rising support line continues to hold while resistance is falling. This apex could last a while longer but obviously it will have to break above or below it eventually.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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