Stocks were mixed and the Dow and S&P 500 were basically flat again yesterday. The Dow added just 13-points and regained some morning losses, but also gave back some larger early afternoon gains, and the S&P 500 had another 1-point day; +1.50 to be exact.
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So the S&P 500 and Dow are holding just below some key resistance while we saw the small caps and I-fund pull back moderately from potential "toppy" looking charts. Bonds were down slightly.
The SPY (S&P 500 / C-fund) was up slightly and analysis is tough when the index barely moves for a week, but as I mentioned to the TSP Talk Plus subscribers, that does have the effect of taking the S&P off its extreme overbought readings so it's not useless action. But the Russell 2000, Nasdaq, and Transportation Index wobbled yesterday and the S&P 500 will likely make a move in one direction or the other by the end of the week.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) seems to be backing off from overhead resistance - what we've been calling the neckline of an inverted head and shoulders pattern. It looks a little "toppy" like we saw in early September.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Russell 2000 (small caps) is also looking "toppy" on the weekly chart.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index has been leading on the upside and it has already broken through the top of the neckline of the inverted head and shoulders. The question is, if we do see some further downside action, will the neckline now act as support?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) has spent the last 11 trading days just below the 50-day EMA after the false breakout at the end of October.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The German DAX may determine which way the EFA breaks. It posted a positive outside reversal day yesterday and the current formation looks as much like a bull flag now, as it does a lower high peak. It is in a bear market now so when in a bear market we should expect bearish results.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was slightly lower, losing the early gains it had in Monday morning's trading. It remains above the 50-day EMA and for now that keeps the F-fund slightly bullish.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and 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 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.
