After being up for 5 of the last 6 weeks, stocks closed slightly lower last week as the market digested a slow week of mixed economic data, the newly announced QE3, the turmoil in the Middle East, and the upcoming election.
Here are the TSP fund returns for the week of September 17 through September 21, plus the up to date annual returns.
For the last several weeks the S&P 500 has been doing a staircase move higher; A consolidation followed by a spike up. It moved sideways all of last week so we can probably expect a sharp move in one direction or the other this coming week. If the pattern continues, it would obviously be up.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The leading market indices are telling different stories so the guidance is mixed. The Nasdaq 100, which is an index of the largest technical companies, made a new intra-day high on Friday. This is a good sign for the market since technology tends to lead the rest of the market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here’s the problem; The big market leader is the Dow Transportation Index and on Friday it closed at its lowest point since early July – moving to the bottom of the recent trading range between 4950 – 5250 and possibly breaking down. The question is, will the Transports turn around here and head back toward the top of the range, or will this index breakdown and send warning signs throughout Wall Street? This is a highly watched Index and if if breaks down investors will take notice.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Housing Index has been on fire. We saw some strong housing reports last week and the index has continued to move higher.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is a good sign for the economy, but it contradicts what the economically sensitive Dow Transportation Index is telling us. This makes for a tough call. I do think the election is having a hand in keeping stocks positive. Despite September being one of the worst months historically, it isn’t quite as bad during election years and that may be what we are seeing here.
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
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