Stocks opened lower on Tuesday, but quickly recovered the early losses, just as we saw on Monday. They basically flat-lined the rest of the day as volume stayed quite light. Earnings have been pouring in this week but have done little to ignite investor's interest so far. The lack of any major economic data seems to have put things on hold so investors continue to wait for clues regarding the Fed's next decision on interest rates.
[TABLE="width: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]
[TD="width: 49, align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Yahoo and a Chipotle were two of the more anticipated reports after close yesterday and both disappointed with YHOO falling about 2% and CMG down 52-points, or 7.3% in after hours trading.
[TABLE="width: 90%"]
[TR]
[TD="bgcolor: #eeeeee"][/TD]
[/TR]
[/TABLE]
[TR]
[TD="bgcolor: #eeeeee"][/TD]
[/TR]
[/TABLE]
The SPY (S&P 500 / C-fund) closed slightly lower yesterday but it has been slowly rising since the recent surge off of the higher low made at the end of September. These slow grinds higher can last a while but when they end can land with a thud. We've talked about that as being an "F" flag. It doesn't mean the upside will be over but a retest of the 50 and 200-day EMA or even the open gap near 195, is possible. The 200-day Simple MA and a descending trendline may present some possible overhead resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (small caps / S-Fund) is battling some overhead resistance as well, and we also have an inverted head and shoulders pattern formed which makes the next move an interesting one.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Some inverted or inverse H&S patterns breakout right away and some pullback to test the middle of the head first.
But head and shoulders patterns, inverted or not, tend to be continuations patterns meaning they break in the direction of the trend they were in before it formed, and in this case that would be down. So there are a lot of considerations here for the small caps.
The Dow Transportation Index has formed a bullish flag pattern which tend to break to the upside, but it is facing some stiff resistance with the descending trendline (red) and the 200-day EMA just overhead.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) may also be forming an inverted head and shoulders pattern so it faces the same questions as the Dow Completion Index above.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The 10-day moving average of the ARMS Index, or TRIN, used to be a very strong indicator for us and buying anytime it moved up to 1.20 area was usually a good move. But when the market gets wild the levels can almost be throw out and you look for the trends. So here it is near 1.20 now, hitting the top of the descending trading channel. This seems like a bullish sign for stocks if it can peak here at 1.20. The higher the number on this chart, the more chance that stocks are going to be bought. It is an inverted indicator in that it tends to go down when stocks are going up, but since it is a moving average, that's not always the case in the short-term.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) was down yesterday as it continues to trade in a rising trading channel.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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 back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
