Stocks had a rough week last week, although they didn't go down without a fight as we saw back to back positive reversal days where the indices closed well off the lows of the day. As we talked about in last week's Wrap-Up, pre-holiday action is often reversed after the holiday and this may have been what we witnessed. Trading volume is light before a holiday and that usually means more investing than trading, so it has a bullish bias. Then, after the holiday, the traders, dip buyers, profit takers, etc., take advantage of prices that may be out of line.
Here are the weekly, monthly, and annual TSP fund returns for the week ending July 11:
The S&P 500 (C-fund) had a modestly bad week, but the C-fund led the other TSP stock funds. We saw the 20-day EMA (green) tested and hold as there were no closes below it. The positive reversal days (red arrows) have consistently preceded upside action in the coming days so this looks good for the short-term for the S&P.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart shows that the trend is clearly up, and demonstrates what a bull market looks like, but the S&P 500 has just hit the top of its weekly resistance line and there is a lot more room on the downside of this long-term rising trading channel.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) also produced a large positive "kangaroo tail" reversal day last Thursday and recent history shows they tend to be buying opportunities. The 50-day EMA held like a brick wall, but I'm a little concerned about the Russell 2000 (not shown) which is the driver of small caps. Its chart is showing a few more cracks.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Bonds had a good week but the AGG bond ETF ended with a negative reversal day right after it hit overhead resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
A short-term bearish bond chart, and some short-term bullish stock chart setups, and it looks good for at least the early part of next week. But some economic concerns in Europe and some question marks on the European stock charts, and we could have a catalyst for some trouble ahead. Add to that the escalating conflict at the Israel / Gaza border, and you never know what kind of Monday morning announcement will impact the market. But it's not the news that concerns us. It's what that news does to the charts that ells the real story.
Good luck and thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. 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.
Here are the weekly, monthly, and annual TSP fund returns for the week ending July 11:
The S&P 500 (C-fund) had a modestly bad week, but the C-fund led the other TSP stock funds. We saw the 20-day EMA (green) tested and hold as there were no closes below it. The positive reversal days (red arrows) have consistently preceded upside action in the coming days so this looks good for the short-term for the S&P.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart shows that the trend is clearly up, and demonstrates what a bull market looks like, but the S&P 500 has just hit the top of its weekly resistance line and there is a lot more room on the downside of this long-term rising trading channel.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) also produced a large positive "kangaroo tail" reversal day last Thursday and recent history shows they tend to be buying opportunities. The 50-day EMA held like a brick wall, but I'm a little concerned about the Russell 2000 (not shown) which is the driver of small caps. Its chart is showing a few more cracks.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Bonds had a good week but the AGG bond ETF ended with a negative reversal day right after it hit overhead resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
A short-term bearish bond chart, and some short-term bullish stock chart setups, and it looks good for at least the early part of next week. But some economic concerns in Europe and some question marks on the European stock charts, and we could have a catalyst for some trouble ahead. Add to that the escalating conflict at the Israel / Gaza border, and you never know what kind of Monday morning announcement will impact the market. But it's not the news that concerns us. It's what that news does to the charts that ells the real story.
Good luck and thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
Facebook | Twitter
The legal stuff: This information is for educational purposes only! This is not advice or are commendation. 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.
