The pre-Fed action has been impressive as the Dow gained another 35-points while the broader indices saw even larger percentage gains. Bond yields were down so the F-fund was up, and the I-fund gave a little back after Monday's strong gains.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 160"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.11%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.42%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.83%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.51%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The FOMC meeting concludes this afternoon and we should see the fireworks start after 2:00 PM ET. Most are expecting some kind of tapering announcement from the Fed, but how much and how will investors react? You would think a small taper is already baked into stock prices by now, so we could be set up for a "sell the news" reaction.
The S&P 500 (SPY) nearly got back the early gains Monday but couldn't quite get past the high on Monday. My eyes are fixed on the open gaps here since there is a high probability they will be filled soon - that is unless the Fed does something to shoot stocks to even higher highs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 Index itself has not made a new high over the early August high, but with few exceptions, every time new highs have been tested since the November lows, we saw an almost immediate breakout.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transports are also still below the August highs and the gaps are here as well. Not much leadership here as it seems to be keeping pace with the S&P 500 lately.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The intermediate-term bonds were up slightly yesterday, as the IEF bond fund held above the descending resistance line for a second day. The hope for bond investors is that this old resistance line becomes support, but it is still declining so they'll want to see it move above 101 (the prior peak) to turn it into a new uptrend.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Fed takes the stage today and will dictate what happens next. We'll talk about it tomorrow.
In today's TSP Talk Plus report we'll take a look at the small caps, short and long-term, an interesting development in the ARMS Index, and we'll take a look at what prior strong first half September have meant for the rest of the month, and the rest of the year.
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
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