Stocks blasted out of the gate in Thursday morning trading, but couldn't hang onto all of the early gains. The indices did finish strongly and we saw modest gains across the board breaking a 5-day losing streak for the Dow and S&P 500. The Dow picked up 55-points.
[TR]
[TD="width: 310"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.14%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.37%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.57%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.15%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S-fund led the way Thursday, while the I-fund lagged the U.S. stock funds, and the F-fund was down after yields rebounded.
The S&P 500 (SPY) gained about 0.4% still leaving the gaps below open. There is some support rising below, and some weaker descending resistance above. The 20-day EMA has been holding for a couple of days, but it held for several days in early August before eventually breaking down. The key will be whether it can break above the descending resistance before breaking below the 20-EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transports are in a similar situation. There's a resistance line falling overhead so the question here is, can the resistance be broken and a new leg up begin before the gaps are filled?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
For the small caps of the Russell 2000, I just wanted to point out the flat top formation here as the 107.50 level on the IWM Russell 2000 ETF has held firmly for 3 straight days, and 4 times since it initially hit that level last week.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
October starts next Tuesday and the bulls may be sorry to see September go... You know, the month that is supposed to be the weakest historically? There's a few days left but September looks like it is going to be a monster unless we do see something major happen in the next two trading days, which is possible considering the current situation.
October is not a bad month historically despite its reputation for being the month with few major market crashes in it over the years. You can see that there is a lot of historically volatility during October with a strong positive bias early in the month, but a very weak stretch during the second half of the month, and a strong 3-day finish near the end.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bond yields saw a relief rally yesterday sending bond prices and the F-fund slightly lower. That was due since yields went nearly straight down for 7 days.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Have a good weekend. It should be an interesting one in Washington. The bulls will be hoping for some kind of settlement while the bears wouldn't mind a little extended chaos.
In today's TSP Talk Plus report we'll look at 30+ years of government shutdowns and what it mean for stocks before, during and after the shutdown. 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
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