Stocks fell as frustration seems to be growing surrounding the government shut down and the upcoming debt ceiling deadline. The Dow lost 137-points and we saw 0.9% losses almost across the board. The I-fund held up but it may pay the price today.
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 156"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.09%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.90%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.97%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.05%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
You might have seen headlines like, "Stocks end lower after Capitol shooting incident", but that is just silly since stocks were at their lows before that incident in Washington occurred. It seems to be about Washington, but it had nothing to do with a shooting.
The indices finished off their lows turning what looked like a possible breakdown, into a possible double test of the 50-day EMA which would form a double bottom "W" like formation.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This morning I posted in the forum that I hated "h" formations. Those "h" formations either break down sharply, or bounce off of the previous. If you're in stocks you risk that "h" turning into a fall below support and those kind of breakdowns can be steep. If you're already out of the market you're watching a potential sharp bounce off of support creating the "W".
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
They are unpredictable but in my opinion they tend to be more bearish than bullish. But perhaps not in this case. How's that for wishy-washy?
The short-term indicators, which were moving upward when I posted this chart yesterday, have turned back down and look a little more ominous. But they are already near extreme levels that "could" mean any more downside, in the short-term, might be limited. Of course the current situation may make it "different this time." But it's always something.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The IEF Bond fund closed above that 102 level it had struggled with lately. The sell-off in stocks sent investors into bonds so the F-fund saw a small gain.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 20-day EMA just crossed above the 50-day EMA, which is generally bullish except it can mean it is overbought in the very short-term.
The charts are giving us one of those formations that are tough to judge. The dreaded "h" formation which can break down precipitously, or find support and end up with a "W" double bottom. Hopefully some of those charts above that the TSP Talk Plus subscribers can see will help them make a decision. Otherwise, we can take out our coins and flip as we wait on our leaders in Washington to come up with a deal on the CR and debt ceiling.
In today's TSP Talk Plus report we'll look at the chart of the Nasdaq, the interesting Sentiment Survey results, plus some stats set up by the recent 9 days of decline in the last 11 days. 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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