05/23/13
Stocks sharply reversed a big positive open on Wednesday as the Dow lost 80-points on the day after being up over 150-points in early trading. Small caps took the brunt of the selling.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.30%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.81%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-1.60%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
S&P 500 put in a nasty negative outside reversal day, where the day's high was higher than the previous day's high, and the low was lower than the previous day's low, and the close was also below the prior day's low. This doesn't necessarily mean stocks will roll off the table right away, but this type of action does happen near market tops - and the opposite happens near market bottoms.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar put in a positive outside reversal day, which is bullish for the dollar, and there is a bull flag formation which leads me to believe new high will be coming (in the dollar).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As we found out throughout this 2013 rally, stocks don't always go down just because the dollar is moving up. But the price of anything that trades in dollars would be negatively impacted to some degree. In our case, the I-fund is greatly inversely impacted by the action in the dollar so with the I-fund losing just 0.04% on Wednesday, we will likely see a large negative Fair Value to be added added to today's (Thursday) I-fund price. Meaning, the I-fund return will do worse than the EAFE index quote.
I don't want to analyze yesterday's action too much since we know this market has been very resilient and we could see a 200-point rally today, but the negative outside reversal is a pretty bearish formation and may be signaling something bearish is coming in the coming days / weeks.
Thanks for reading! We'll see you here tomorrow.
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.
Stocks sharply reversed a big positive open on Wednesday as the Dow lost 80-points on the day after being up over 150-points in early trading. Small caps took the brunt of the selling.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.30%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.81%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-1.60%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
S&P 500 put in a nasty negative outside reversal day, where the day's high was higher than the previous day's high, and the low was lower than the previous day's low, and the close was also below the prior day's low. This doesn't necessarily mean stocks will roll off the table right away, but this type of action does happen near market tops - and the opposite happens near market bottoms.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar put in a positive outside reversal day, which is bullish for the dollar, and there is a bull flag formation which leads me to believe new high will be coming (in the dollar).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As we found out throughout this 2013 rally, stocks don't always go down just because the dollar is moving up. But the price of anything that trades in dollars would be negatively impacted to some degree. In our case, the I-fund is greatly inversely impacted by the action in the dollar so with the I-fund losing just 0.04% on Wednesday, we will likely see a large negative Fair Value to be added added to today's (Thursday) I-fund price. Meaning, the I-fund return will do worse than the EAFE index quote.
I don't want to analyze yesterday's action too much since we know this market has been very resilient and we could see a 200-point rally today, but the negative outside reversal is a pretty bearish formation and may be signaling something bearish is coming in the coming days / weeks.
Thanks for reading! We'll see you here tomorrow.
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.
