Stocks rallied again on Thursday, with the Dow and large caps continuing to the lead the way. The Dow gained 60-points and the S&P 500 added 0.30%. That's four in a row, all during a week that is historically below average during a mid-term election year.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund led the was with a 0.49% gain, helped by a small loss in the dollar. Bonds and the F-fund rebounded from an area of support that we have been watching.
The SPY (S&P 500 / C-fund) didn't seem to have any trouble moving up to new highs on Thursday. The rising trading channel remains intact but it is rather steep and won't last forever, but if we continue to roll along like we had in the first half of 2014, I guess we should be buying every 2 to 3 day dip? Or is it different this time?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
What's impressive, if not suspicious, is that this two week rally has come right when stocks have historically started to show weakness during a mid-term election year. The last two week in August have a bad record, and the final week has an awful historical record during midterms, so it will be interesting to see if the rally can continue next week.
The Russell 2000 (small caps) were down rather sharply in early trading on Thursday, but they rebounded strongly and posted another positive reversal day, and it was an outside day. You can see how much the small caps are lagging the S&P 500 (and Dow and Nasdaq) as it is still well off the July high.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The London FTSE (which is 22% of our I-fund) has flattened out in the last couple of days, and while that is not surprising given the recent quick spike higher, prior "flat tops" in this index have led to peaks going back to May. It is also approaching a strong descending resistance line.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (I-fund) has continued to rally on light volume and start to encroach on a confluence of potential resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The IEF (Bonds / F-fund) bounced off the 20-day EMA and remain above the breakout area of the cup and handle formation. This is leaning bullish for bonds, as long as that support line holds.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Administrative Note: We're starting the 2014 "Last Man Standing" NFL football pool for the NFL. It's real easy and it's free. The deadline to sign up is Sept. 7. For more info see TSP Talk NFL Pool.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and its 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! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
