The Fed surprised almost everyone on Wednesday as they announced no slowdown in their bond buying policy. The taper will have to wait. Everything went up in price; stocks, bonds, gold, oil, and especially the I-fund, as the dollar dropped like a rock. The Dow gained 147-points.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 172"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.74%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +1.22%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +1.00%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +2.96%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Once again the Bizarro World took center stage as investors celebrated the fact that the Fed believes the economy is not doing well enough to slowdown their Quantitative Easing. Bad economy equals more cheap money for investors. The rich get richer while most Americans have no idea what quantitative easing is. Poll: With the end of Fed's QE in sight, U.S. public says 'Huh?'
The S&P 500 (SPY) broke out to new highs on good volume. This has been an "all's clear" all year for the bulls. Is it different this time? I don't know, but I will have some data to show TSP Talk Plus members why it may or may not be.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The NYSE jumped to an extreme overbought reading yesterday, hitting its second most overbought level since last year at this time.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar tanked on the Fed's announcement. It broke below some recent lows and sent prices on just about everything higher.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Like everything else that trades in dollars, bonds also rallied strongly after the FOMC meeting. An open gap was nearly filled on the IEF 7-10 year bond fund, and the 50-day EMA was broken.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
And of course that meant yields were down, and they were down hard. The rising support line was taken out on the 10-year yield this week. There is an open gap near 2.6%, which isn't far off, but the 50-day EMA would have to be taken out to get there.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
In today's TSP Talk Plus report we'll take a look at a few more charts including some interesting results after prior times when the market moved like this after a Fed meeting.
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 TSP Talk Market Commentary
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.
