Stocks opened higher on Friday but there seemed to be some tentativeness as the day went on. The important OPEC meeting on Sunday of this past weekend could be a market mover so buyers weren't as enthusiastic and took some risk off the table. The Dow lost 29-points on the day with the small caps, which have perked up again, leading the way with a 0.22% gain. Bonds were also up.
[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]
Oil was down again on Friday, falling back below the 200-day EMA, and the OPEC meeting did not produce an agreement to freeze production so it should be under some pressure today. The futures fell below $38 to start trading on Sunday.
What that does to stocks remains to be seen, but I see the major equity futures just opened sharply lower as I write this on Sunday evening.
The SPY (S&P 500 / C-Fund) broke out a bullish flag-like formation mid-week last week, opening a gap near 206. The prior highs are between the blue box on the chart and seeing a pullback from this 208 - 209 area wouldn't be a surprise. Getting the gap filled is job one before any more advance, otherwise the bulls will always be looking over their shoulder at that gap knowing it's likely a matter of when, not if it gets filled. With the way the futures are acting on Sunday evening, that fill could happen today.
The weekly chart of the S&P 500 shows the next area of resistance and 2090 is the immediate level for this week.
The DWCPF (S-fund) closed for a third straight day above the 200-day EMA as the small caps have come back to life. But in the short-term we have a small three-day flat top and as you see, recent prior flat tops led to minor pullbacks. The question will be whether the 200-day EMA can hold as support if it does pull back.
The EFA (EAFE Index / I-fund) also closed above the 200-day EMA for a third day but that open gap looks like it may try to get filled if the futures hold their losses overnight. It's possible that the futures improve before the open and then we'll see if the 200-day EMA has any support in it.
The Japanese Nikkei rallied strongly last week and moved above the 50-day EMA, but is up against some descending resistance as it starts the new week.
The German DAX, one of the I-fund leaders, has some overhead resistance issues and a large open gap with the bottom of it just below the 50-day EMA. There's a possible large rising wedge that could also be part of a large bear flag, so the next week or two could be make or break for this index.
The AGG (Bonds / F-fund) was up solidly on Friday as the bond market refuses to rollover. It based for about a month before breaking out in March. Now it has formed a smaller base and looks to be eying the 111 breakout. As they say, when a chart starts in the lower left hand corner and ends in the top right, you have yourself a bull market.
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 tomorrow.
Tom Crowley
