09/03/13
Stocks saw modest losses on Friday, although small caps and the I-fund took bigger hits. The Dow lost 31-points on the day, a day with an historically positive bias. This week has a weaker than normal historical bias, yet the futures are up sharply Monday night, so it looks like it's going to be a good start to September. But then again, gap opens on Monday mornings, or in this case a Tuesday after a Monday holiday, can not always be trusted.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 162"]
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[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0120%[/TD]
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[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.04%[/TD]
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[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.31%[/TD]
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[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -1.21%[/TD]
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[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.86%[/TD]
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[TABLE="width: 69%, align: center"]
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[TD="align: right"] [/TD]
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After hitting record highs on the 2nd trading day of the month, things took a turn for the worst in August and the Dow ended the month with a 4.4% loss. The broader indices saw losses below 3%, while the I-fund was down just 1.3% in August. Bonds also took a 0.48% hit.
The S&P 500 (SPY) filled an open gap (red) last week and during its move lower from the early August highs, created two new open gaps (green) that will want to get filled. Should the overnight futures gains rollover into Tuesday's open, we could see that first gap get filled right away.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The leading Dow Transportation Index fell to a 9-week low on Friday. Technically, this chart is broken, but there is room to move higher as the 50-day EMA, the open gap, and the descending resistance line are a couple of percentage points above current levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar found some strength last week and that gave the I-fund some trouble. The UUP dollar ETF made some higher highs last week, but it hit the 200-day EMA and backed off on Friday. There's an open gap below that needs filled, but we could have a new rising trend starting. But once again it is not a simple call because it all happened during pre-holiday trading.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I don't usually get caught up in the price of oil, but whenever it flirts with $110 we have to keep an eye on it. It looks like the turmoil in Syria is having an effect but crude fell back down after a quick spike above $110 on Wednesday of last week. This chart looks bullish for oil, which may not be very bullish for consumers in the coming weeks as they'll eventually have to pay up when the price of gasoline rises.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The start to September has a positive bias but many times the first few trading days in September happen before the holiday weekend. This year September trading starts after the holiday. Still, it looks like we'll see the early strength that early September brings, but after that the September seasonality is the worst month of the year.
Chart provided courtesy of www.sentimentrader.com
On Friday we get the August jobs numbers and by then we'll be in the red part of the seasonality chart.
In today's TSP Talk Plus report we'll go over several more charts including bonds, small caps, and a longer-term look at the S&P can may be telling. 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 TSP Talk Market Commentary
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