Stocks went on a wild ride yesterday before closing with just modest losses. The Dow opened lower, but shot up into positive territory, then, by mid-afternoon, we saw triple digit losses and finally, despite inching back into positive territory again during the last half hour of trading, it closed down 25-points. Bonds were also down yesterday.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] -0.30%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] -0.10%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] -0.05%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] -1.06%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund took the full brunt of the decline since the U.S. stocks rallied late in the day. It may play catch-up with Thursday's share prices.
The S&P 500 (SPY) fell below the 20-day EMA but the intra-day lows did not last long and the SPY closed back above it, creating a "spinning top" candlestick formation, which tells us investors were indecisive yesterday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's stockcharts.com's definition of a spinning top candlestick formations: "One long shadow represents a reversal of sorts; spinning tops represent indecision. The small real body (whether hollow or filled) shows little movement from open to close, and the shadows indicate that both bulls and bears were active during the session. Even though the session opened and closed with little change, prices moved significantly higher and lower in the meantime. Neither buyers nor sellers could gain the upper hand and the result was a standoff. After a long advance or long white candlestick, a spinning top indicatesweakness among the bulls and a potential change or interruption in trend. After a long decline or long black candlestick, a spinning top indicates weakness among the bears and a potential change or interruption in trend."
The small caps of the Russell 2000 fell down to the bottom of its rising trading channel before finding support and rebounding. It's still a good looking chart as long as that rising channel remains intact.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The leading Transportation Index fell below the rising wedge formation on Tuesday and like the other indices, lost more ground yesterday. It managed to barely close above the 20-day EMA after plunging below it during the early trading.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar has spent a month in the pennant formation with it nearly hitting both sides of the pennant yesterday before closing flat. This is a narrowing falling wedge and if I had to guess I'd say it looks like it wants to break to the upside, although fundamentally, with the Fed's QE still in high gear, I don't know why the dollar would rally, unless it is in anticipation of QE tapering in the near term future.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds dropped sharply on Wednesday and the 7 to 10 year ETF (IEF) fell below the neckline of its head and shoulders pattern. This is a very bearish move for bonds, and as long as it is below that neckline, I would avoid the F-fund.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This Friday we get the November jobs report. Estimates are looking for approximately 200,000 new jobs being created, and an unemployment rate of 7.2%. What do you think? We have our monthly jobs report contest going on in the Forum.
In today's TSP Talk Plus Report we take at the put / call ratios, and more investor investment ratios hitting extremes. 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.
