Volatility picked up last week as the Dow started the week with a 266-point loss on Monday, then a 158-point gain on Tuesday, another 138-point loss on Thursday, then an 81-point loss on Thursday and, even though the Dow was up only 10-points on Friday, the S&P 500 was up almost 1% on the day. IBM’s weaker than expected earnings report put pressure on the Dow.
Here are the up to date TSP fund returns through April 19:
The S&P 500 (C-fund), represented by this chart of the SPY, is at a very interesting juncture. Friday’s rally took it up to a double resistance point and the 20-day EMA, but the 50-day EMA held twice last week so there is some support below.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps (which influence the S-fund) have been lagging as not only has the 50-day EMA broken down on the Russell 2000, but it has now made a lower low and that smells of a downtrend. That’s a warning sign from this leading index.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds (F-fund) have flirted with new highs and haven’t yet pulled back from a double top.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Being that we already saw a decent pullback from the early April highs, this TLT bond ETF may be ready to make those new highs. Stocks will have their say, however. If the stocks market can rally this week, we probably won’t see a new high on the TLT. But this coming week is a post options expiration week and historically post options weeks are weaker than a random week. Post options week will run into some big name companies reporting earnings, including Apple, and they could be the true catalyst for the week, barring any major economic news.
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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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.
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