Dollar vs. the S&P
After getting off to a great start last week, stocks gave back the early gains after a series of weak economic reports released later in the week.
For the week, the TSP funds were mixed as the C-fund lost 0.65%, the S-fund added 0.31%, and the I-fund fell 1.26%. Bonds (F-fund) picked up 0.25% and the G-fund added 0.05%.
For the month, the C-fund is now down 2.55%, the S-fund is off 3.99%, and the I-fund has given up 2.84%. Bonds are benefitting from investor’s nervousness as the F-fund is up 0.83% in August, and the G-fund is up 0.14%.
After breaking down from the rising wedge formation a couple of weeks ago (in blue) , the S&P 500 formed a bear flag (red), and as the name might suggest, bear flags tends to be a bearish setup for stocks. On Thursday of last week the flag broke down the chart is not looking promising.
We have been talking in our daily commentary about the recent inverse correlation between the stock indices and the U.S. dollar. The dollar had been falling relentlessly from early June until it bottomed out earlier this month, but since then it has rallied and created a bull flag – the opposite of the bear flags we see throughout U.S. stock index charts.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Once the bull flag on the dollar broke out to the upside, the bear flags on the stock charts broke down. So, we will be watching the action in the dollar closely to see if this pattern continues.
There is a lot more going on the chart of the S&P 500 but we don’t have time to cover it here. Please check in regularly with our daily market commentary where we will keep a close eye on all of the developments.
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
After getting off to a great start last week, stocks gave back the early gains after a series of weak economic reports released later in the week.
For the week, the TSP funds were mixed as the C-fund lost 0.65%, the S-fund added 0.31%, and the I-fund fell 1.26%. Bonds (F-fund) picked up 0.25% and the G-fund added 0.05%.
For the month, the C-fund is now down 2.55%, the S-fund is off 3.99%, and the I-fund has given up 2.84%. Bonds are benefitting from investor’s nervousness as the F-fund is up 0.83% in August, and the G-fund is up 0.14%.
After breaking down from the rising wedge formation a couple of weeks ago (in blue) , the S&P 500 formed a bear flag (red), and as the name might suggest, bear flags tends to be a bearish setup for stocks. On Thursday of last week the flag broke down the chart is not looking promising.
We have been talking in our daily commentary about the recent inverse correlation between the stock indices and the U.S. dollar. The dollar had been falling relentlessly from early June until it bottomed out earlier this month, but since then it has rallied and created a bull flag – the opposite of the bear flags we see throughout U.S. stock index charts.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Once the bull flag on the dollar broke out to the upside, the bear flags on the stock charts broke down. So, we will be watching the action in the dollar closely to see if this pattern continues.
There is a lot more going on the chart of the S&P 500 but we don’t have time to cover it here. Please check in regularly with our daily market commentary where we will keep a close eye on all of the developments.
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
