Mixed day

Stocks were mixed on Tuesday with the Dow down 86-points, although it had been down about 150-points at the lows. By contrast the S&P 500 lost just 2-points on the day and small caps, the Nasdaq, and the Transports all closed in positive territory. Once again the dollar held back the I-fund.

[TABLE="width: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]

[/TD]
[TD][/TD]
[TD="align: center"] Daily TSP Funds Return

[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"]

More returns​

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Here are the final TSP Fund returns for May:

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[TABLE="width: 69%"]
[TR]
[TD] [TABLE="width: 427"]
[TR]
[TD="width: 87, align: center"] Fund[/TD]
[TD="width: 68, align: center"] G Fund[/TD]
[TD="width: 68, align: center"] F Fund[/TD]
[TD="width: 68, align: center"] C Fund[/TD]
[TD="width: 68, align: center"] S Fund[/TD]
[TD="width: 68, align: center"] I Fund[/TD]
[/TR]
[TR]
[TD] % Chg month -[/TD]
[TD="align: center"] +0.13%[/TD]
[TD="align: center"] -0.02%[/TD]
[TD="align: center"] +1.89%[/TD]
[TD="align: center"] +1.52%[/TD]
[TD="align: center"] +0.32%[/TD]
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[/TABLE]
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[TD="width: 87, align: center"][/TD]
[TD="width: 68, align: center"] L Income[/TD]
[TD="width: 68, align: center"] L2020[/TD]
[TD="width: 68, align: center"] L2030[/TD]
[TD="width: 68, align: center"] L2040[/TD]
[TD="width: 68, align: center"] L2050[/TD]
[/TR]
[TR]
[TD] % Chg month -[/TD]
[TD="align: center"] +0.37%[/TD]
[TD="align: center"] +0.69%[/TD]
[TD="align: center"] +0.91%[/TD]
[TD="align: center"] +1.04%[/TD]
[TD="align: center"] +1.16%[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]

On Friday morning we get the May jobs report and estimates are looking for a gain of 155,000 jobs, and an unemployment rate of 4.9%. The Jobs Report Contest is now open in the forum. Click here for more info.

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The economic data has been coming in rather weak recently and the main concern now is that the Fed may be determined to raise interest rates this summer, whether this month or next, yet the economy is not showing much strength. The Fed used to say it was "data dependent" but the other day Janet Yellen had a different tone about the hikes. That is something that could shake up the market. It is one thing to raise rates when the economy is strengthening, but recent reports like the Chicago PMI and Consumer Confidence came in light and that's a concern.

I may be totally off, but I sill think the Fed, which has become more political in recent years, is going to take the election into consideration, and I would be surprised if we saw a hike before the election in November. A move in rates could impact the economy and the economy is the number one issue on voters' minds, so do you think they would make a move that could potentially negatively impact the economy in the interim?

So the question we're hearing "around the Street" is whether a rate hike is already priced in or not. If is not and we get a hike, it could be rough sailing. If it is and we don't get one, we may or may not get a pop because no hike could be interpreted as major weakness. Because of this, the signs point to some weakness in June for stocks but the seasonality chart during an election year, and the fact that many are anticipating weakness, could be bullish signs.

The S&P 500 (C-Fund) closed well off the lows yesterday, but also well off the morning highs. The double top at the April highs would normally pose some resistance at least in the short-term. Whether it's a longer term double top remains to be seen. You can make a case for either side, but the uncertainty with the Fed will either put pressure on stocks, or as we've seen before, get people leaning the wrong way. We see a possible "F" flag forming, which is bullish in the short-term but clearly the April high is the next concern.

The DWCPF (S-fund) performed well on Tuesday as it actually made a new 2016 intraday high yesterday, but closed below it. There is a small open gap that could get some attention, and being filled wouldn't be the worst thing in the world to happen, although it would be about a 1.5% loss from the current level.

The Dow Transportation Index managed to close above the 200-day EMA for the first time since May 10, which lasted just one day. There is a narrow rising trading channel playing out and we'll see how long that can hold.

The Nasdaq 100 (QQQ) filled an open on Friday and sometimes the tops of an open gap will act as resistance, so this positive reversal day that closed above the gap may be a good sign for the Q's.

The EFA (I-fund) dropped yesterday largely in part to another move up in the dollar, which has been rallying since it bottomed a month ago...

... which you can see here.

The AGG (Bonds / F-fund) had a big positive reversal day as it initially fell to test the 50-day EMA again, which held and actually closed at its highest level since May 17. It still looks like a possible bear flag so it needs to rally again to break that formation.

Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss 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 www.tsptalk.com/comments.php

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.