Where’s the breakout?
The market action resembled that of an EKG chart last week as we saw a lot of up and down action. Unfortunately Friday’s triple digit loss in the Dow took most major indices into the red for the week.
For the TSP, the C-fund slipped 0.11% for the week. The S-fund held onto a 0.19% gain, and the I-fund lost 1.86% as the strength in the dollar really hurt this fund. Bonds (F-fund) added 0.06%, and the G-fund was up 0.06%.
For the month of May the C-fund is now down 1.79%, the S-fund is off 2.62%, and the I-fund lags the pack being down 4.59% on the month. The F-fund (bonds) is up 0.63% in May, and the G-fund has made 0.10%.
I sound like a broken record but the forces that have been at work for the last couple of weeks are the ones we are still watching today: The dollar and this inverted head and shoulder formation.
The S&P 500 continues to test the neckline of this formation and I’m afraid the longer it takes to make a clean upside rally off of the neckline, the more likely it is that we could see this break down.
Chart provided courtesy of www.decisionpoint.com
There is fairly strong support here in the high 1330’s – 1340 area and just reading the chart and knowing how inverted head and shoulders patterns tend to play out, I would expect this to resolve to the upside. But we are seeing some cracks in some of the indicators that would have us believe things could get a little tougher in the short-term. And with the recent strength in the dollar, the S&P 500 may have to prove itself without the help of a weaker dollar – something it has had in its favor for several months now.
You can see that the dollar has been in a long-term declining trend but it recently broke above its short-term-term.
Chart provided courtesy of www.decisionpoint.com
There is some overhead resistance as the 200-day EMA falls toward the long-term descending trading channel, but should the dollar move up to hit that resistance, I’m afraid that may be a little too much strength (in the dollar) for the stock market to handle. Of course we will just have to see how it plays out.
Bottom line, stocks are still in a positive position but the longer the S&P 500 dances on that support line without making a move higher, the more likely we will see that support break. That’s what we need to keep an eye on this week.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
The market action resembled that of an EKG chart last week as we saw a lot of up and down action. Unfortunately Friday’s triple digit loss in the Dow took most major indices into the red for the week.
For the TSP, the C-fund slipped 0.11% for the week. The S-fund held onto a 0.19% gain, and the I-fund lost 1.86% as the strength in the dollar really hurt this fund. Bonds (F-fund) added 0.06%, and the G-fund was up 0.06%.
For the month of May the C-fund is now down 1.79%, the S-fund is off 2.62%, and the I-fund lags the pack being down 4.59% on the month. The F-fund (bonds) is up 0.63% in May, and the G-fund has made 0.10%.
I sound like a broken record but the forces that have been at work for the last couple of weeks are the ones we are still watching today: The dollar and this inverted head and shoulder formation.
The S&P 500 continues to test the neckline of this formation and I’m afraid the longer it takes to make a clean upside rally off of the neckline, the more likely it is that we could see this break down.
Chart provided courtesy of www.decisionpoint.com
There is fairly strong support here in the high 1330’s – 1340 area and just reading the chart and knowing how inverted head and shoulders patterns tend to play out, I would expect this to resolve to the upside. But we are seeing some cracks in some of the indicators that would have us believe things could get a little tougher in the short-term. And with the recent strength in the dollar, the S&P 500 may have to prove itself without the help of a weaker dollar – something it has had in its favor for several months now.
You can see that the dollar has been in a long-term declining trend but it recently broke above its short-term-term.
Chart provided courtesy of www.decisionpoint.com
There is some overhead resistance as the 200-day EMA falls toward the long-term descending trading channel, but should the dollar move up to hit that resistance, I’m afraid that may be a little too much strength (in the dollar) for the stock market to handle. Of course we will just have to see how it plays out.
Bottom line, stocks are still in a positive position but the longer the S&P 500 dances on that support line without making a move higher, the more likely we will see that support break. That’s what we need to keep an eye on this week.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
