Stocks were up for 6.25 of the 6.50 hours of trading yesterday, even after a policy statement announcement and a press conference from Janet Yellen. It wasn't until late in the day, after all was said and done, that a switch went off and stocks fell off the table. The daily losses were minor, and some indices finish in positive territory, but the quick decline wiped out some solid gains. The Dow ended the day with a 35-point loss.
[TABLE="width: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]
[TD][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The Fed did not raise rates, as expected, but gave more indication that they are less likely to raise in the near future, and it looks like maybe just one hike later in the year. That's not a surprise to us since we knew the election had to be considered, even though they specifically said it was not a consideration. Yellen mentioned the weak jobs report and the Brexit vote next week. Bottom line, the indices were fairly flat with a mix of small losses and small gains. The small caps closed with some gains, as did the I-fund, which was not as impacted given the timing of the late sell-off. The dollar also slipped on the policy statement and that helped the I-fund.
Volatility is up again and that means panic-like sell-offs are more possible. But it could also mean investors are getting overly worried. It's a sticky situation.
The SPY (S&P 500 / C-Fund) is still below the longer-term rising trading channel but remains just above the 50-day EMA. It has been down for 5 straight days and looks vulnerable, but it is also clinging closely to support.
The DWCPF (S-fund) closed with small gains after giving back some larger gains creating a negative reversal day. It has been able to hold onto the rising support line and remains above the 50 and 200-day EMAs. That's not bad at the moment.
The EFA (I-fund) was up, and as I said earlier it was because the selling came late in the U.S. while the overseas markets were close, plus the dollar was down. The most recent open gap was almost filled but there are many more to deal with.
The Volatility Index, or fear gauge, had fallen significantly from the Tuesday highs, but that last half hour of trading sent it back over 20. Anytime you are over 20 there is significant fear in the air that could turn to panic - but panic could also turn into a bottom. It's a fine line.
The AGG (Bonds / F-fund) was up on the no hike talk as the dollar lost value and yields moved lower.
The TSP Talk U.S. Open Golf Tournament Contest is starting today. The deadline to enter is 6:30 AM ET. Go here for more information!
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.
