Stocks opened higher on Tuesday but lost steam in afternoon trading and the Dow let a 90-point gain turn into a small loss. Negative reversals tend to lead to some short-term downside follow-through, but it doesn't necessarily mean today will be a down day by the close.
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The I-fund closed higher, mostly because U.S. stocks were up when the international markets closed. The small caps lagged and bonds were up.
The S&P 500 (C-fund) was down and posted a negative reversal day so we "should" see some weakness early today, and as you can see in the chart below, there's a decent possibility that we could see one more push lower before stocks turn and make new highs. At least that's how it looks now if the recent repeating pattern holds.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) still looks fine but it also posted a negative reversal day so we might see a test of that rising dashed line today.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) was down despite the TSP giving the I-fund a little gain. That might be adjusted with today's price. It hit a double top and there are some small gaps that could be filled below.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was up slightly and remains in a rising trading channel after successfully testing the bottom of the channel Tuesday morning.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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