Stocks opened lower on Friday but battled back and in another light volume, post Labor Day trading day, closed with solid gains. The Dow added 103-points and that makes 7 of 8 days in September with a triple digit gain or loss, so volatility continues.
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The modest gains on Friday were not enough to keep the TSP stock funds out of the red for the year, and the I-fund is leading with a 0.54% loss in 2015. Bonds were up on Friday.
The futures were up about a half of a percent early Sunday evening, but they are falling as the Asian markets are under serious pressure.
The SPY (S&P 500 / C-fund) rallied last week on fairly light volume, relatively speaking when compared to the August correction. When I look at this chart it looks more like a bear flag than a bull flag but the market looks like it could go either way, and we know the Fed will probably be the catalyst later this week. It's kind of a gamble right now.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
I posted the weekly chart on Friday but this data shows how the bulls and bears have battled since early July trading positive and negative weeks in the S&P 500.
The Dow Completion Index (small caps / S-Fund) appears to be in a bear flag but it still has not broken down keeping some "V" bottom hopes alive.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index has rallied nicely off the August lows, but we have a bear flag and a rising wedge, both bearish technically, and the 50-day EMA is close to being tested. In a bear market, this could be bad news, but if it can manage to get back above the 50 EMA, the chart would be in better shape.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The leader in Europe, the DAX, is in a similar situation as the S&P 500 in that there is a possible bear flag glaring at us, but it if we take the August 24 reversal as a possible bull flag pole, it gives the chart a positive look. But being that it is in a bear market, I still think we should anticipate a bearish outcome.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
China's Shanghai Index has been floating upward since the August lows, but we've seen this before. Is this just another trap before we see another leg down, or was the August low the bottom?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) was up on Friday but closed off the highs creating a possible negative reversal day. It was minor however, and it is now above the major moving averages and still within the rising trading channel.
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 www.tsptalk.com/comments.php
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