Stocks were mixed on Friday with the Dow losing 18-points while the TSP stock funds were basically flat with just miniscule gains for the C, S, and I funds of 0.04%, 0.02%, and 0.03% respectively.
The market has been very flat in general lately as we have seen five days in a row where the Dow closed +/-0.23% or less on the day. For the S&P 500 it has been even less volatile, which doesn't seem possible. For the S&P, 5 of the last 6 days have seen closes of +/-0.07% or less. That's an average of about 1.4 points a day.
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Bonds led the day on Friday with a 0.11% gain, but it is stocks, which have been overdue for some kind of pullback, that have impressed by holding close to those recent new highs. But that could change this week.
The SPY (S&P 500 / C-fund) peaked on Thursday at the neckline of the large inverted / inverse head and shoulders pattern that we have been talking about for a while now.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
There is no rule that the S&P 500 has to pullback here at the neckline, but that's the tendency - to see a right shoulder (RS) form.
The Wilshire 4500 (S-fund) is also stalling near its neckline of the possible inverted head and shoulders. It has clearly run a long way in a short period of time and it wouldn't be a surprise to see some profit taking at resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart of the Wilshire 4500 shows a possible negative reversal bar peak - similar to previous tops in 2014.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) continues to struggle to get back above the 50-day EMA. It may be too early to say, since a big up day could propel it back above the 50-day EMA, but it sure looks like this chart is trying to make another lower high.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The German DAX, which is a big part of the I-fund, also looks to be trying to create a lower high - although in late August there was a similar looking top forming (blue) but that turned out to be a fake out and the DAX didn't peak for another three week.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) has consolidated since breaking above the descending trading channel, and it has held above the August highs and the 50-day EMA. It looks like it may want to hold and go higher, but if that 50-day EMA breaks down, all bets are off for the F-fund.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
