Stocks continue to struggle as a barrage of negative Hillary Clinton headlines are pushing the polls closer and closer, and Wall Street really hadn't priced in a potential Trump victory so this seems to be a little posturing for that possibility. The Dow lost 105-points, but if there was any good news it was that the indices closed well off the lows as the Dow recovered from an earlier 200-point deficit.
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Small caps were hit hardest as the swings impact them most when volatility spikes. The dollar was down sharply and that helped to somewhat cushion the blow for the I-fund.
Today is day two for of a 2-day FOMC meeting. Technically the Fed could announce a rate hike today, but most don't expect it as there is no press conference scheduled, but they could give more clues about December's meeting.
The October Jobs Report comes out on Friday morning and the consensus estimates are looking for a gain of about 175,000 and an unemployment rate of 4.9%. The Jobs Report Contest is now open in the forum. Click here for more info.
As we look at the charts below you will many are at or near key pivot points where longer-term support will either give way, or hold and trigger a reversal back up. There are indicators that might help the bulls' case, but also a few that the bears are clinging to. This happens a few times during the year and if you are lucky enough to guess correctly as to which way it is going to go, your account will thank you.
The SPY (S&P 500 / C-Fund) fell through the prior lows for a clear breakdown, but once it neared the 200-day EMA things turned around and it nearly closed back on top of those old lows just above 211. Volume has been spiking, but not to the degree we saw at prior lows, although big increases in volume and the VIX may be showing signs of panic. The key now is whether yesterday's reversal can follow-through to the upside, and if it does not continue higher, then of course the 200-day EMA becomes a focal point. The bull flag is still intact as the bottom of the flag was tested and held at yesterday's lows.
The weekly chart shows a break below the old highs but the 50-week EMA held and it bounced as if it hit a wall.
The DWCPF (S-fund) is usually more volatile than the S&P and that has certainly been the case lately. Just when it looked like the 200-day EMA was going to hold after 3 successful tests above it, it broke down on Tuesday despite closing off the lows. You can see that in June the Brexit sell-off fell below the 200-day EMA for a few days before it did some do or die rallying.
The Dow Transportation Index was down but again the 50-day EMA held by the close so it continues to show some relative strength.
The EFA (I-fund) fell below the 200-day EMA but closed right on it after the afternoon rally.
The price of oil also reversed up from a weak morning of trading and closed above the rising support line, which it had fallen below earlier in the day.
The AGG (Bonds / F-fund) was down slightly but it traded in a fairly wide range. It still has not filled the overhead open gap as the bottom of the head and shoulders is acting as resistance.
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
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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