Stocks sank at the open as the Sunday night futures indicated, but the lows were hit in the first few minutes of trading and held up pretty well. No deal yet as I write this on Monday night, which could mean a government shutdown by the time you read this. The market will tell us how serious this is.
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 160"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0197%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.01%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.60%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.15%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.96%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The Dow ended the day down 129-points, while the S&P 500 lost 0.6% and small caps held up well again losing just 0.15%. The I-fund lagged losing 0.96% on the day.
The losses on Monday put a dent in the September return, but the month ended with some pretty impressive gains despite those losses.
Yesterday I used the word "clean" to describe what I hoped would be some obvious support levels holding. The S&P 500 (SPY) did just that. It's way too early to celebrate but you can see that the SPY bounced off of the 50-day EMA and the bottom of the now filled gap. So far so good here.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Now, here are some issues: Many times the 50-day EMA will hold on the first test, then break quickly afterward. As I mentioned yesterday, we saw this happen in August and it took another 2 weeks before the market bottomed.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's a little good news for stocks: Over the past 8 months, the total U.S. mutual fund inflows have amounted to $102 billion, the highest since the first half of 2007 and one of the higher year-to-date figures through the end of August in 30 years. Only one of the 7 larger inflows over those 30 years saw a negative return over the rest of the year, while 6 of 7 ended the year with some impressive gains.
Courtesy of www.sentimentrader.com, analysis by TSP Talk
Bonds were relatively quiet yesterday as the 10-year yield slipped 0.2% while the 30-year yield was up slightly. That added up to the F-fund being basically flat on the day (-0.01%).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I write this Monday night, the futures are modestly higher despite the deadline being just a couple hours away. This tells me that the market may not be overly concerned but you never know how investors will react when it becomes a reality. My hunch is the market will do better than the media might suggest, but then again, my hunches are about as good as our sentiment survey... It's part of the dumb money.
In today's TSP Talk Plus report we'll look at the charts of the Nasdaq, Dow, and small caps, plus the intermediate-term indicators which is a lot more troublesome than the charts might suggest. 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
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