After some carnage this week, the indices attempted to rally yesterday, but the not all of the indices participated. The Dow did gain 26-points and the S&P 500 was up slightly, but the Nasdaq and small caps remained in negative territory, not something you'd want to see from the leaders.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 159"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.04%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.07%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.47%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.08%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Some might call what we saw yesterday a "dead cat bounce", but the indices did close well off their lows and we did have some positive reversal days on the charts on solid volume, so it was actually not that bad of a day.
The S&P 500 (SPY) stayed below the 50-day EMA but did close well off the lows so we might expect some upside follow-through today - at least in early trading.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq fell below its 50-day EMA for the first time since June, but it also finished well off the lows while trading volume was high. It was a loss, but technically this isn't horrible. It would be a lot more encouraging if it can get back over the 50-day EMA in the next couple of trading days.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow (DIA) has been in a free fall descending trading channel since the peak in mid-September. It tested the August low in early trading yesterday before rebounding on descent volume. It would have been a better situation had it closed closer to the daily high, but the key is that support line, which happens to be near the 200-day moving averages.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds and the F-fund pulled back yesterday as the 50-day EMA is being tested again. The initial bull flag breakout earlier this week did not follow-through so the flag pattern continues.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I have been mentioning, any kind of default on the debt (which is a long shot) would spike bond yields higher and send bond prices and the F-fund lower. But bond traders are usually pretty savvy folks and the 10+ year bond charts are not really showing any indications that is going to happen. Let's hope they are right.
We have some interesting charts in today's TSP Talk Plus report. We'll look at a few more charts including the VIX, some short-term indicators, plus what the Dow has done in prior instances when it hits the 200-day moving average for the first time during a year in October. It's actually a pretty rare event.
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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