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| Today's Commentary |
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Bears remain in charge Stocks closed lower again yesterday, despite a decent open. The jobless claims came in slightly lower than expected and stocks opened higher, but by the close the bulls took over and the Dow fell 74-points.  For the TSP, the C-fund was down 0.77% on the day, the S-fund fell 0.78%, while the I-fund made up for Wednesday's losses and gained 0.39%. The F-fund (bonds) gained 0.17%. How low can bond yields go? The S&P 500 is negotiating its way through support and resistance levels to help give us some sense of what could happen, but this is a dangerous market and with the late summer light trading volume, I'm not sure anyone knows what the market is capable of. The head and shoulders patterns are weaved throughout the S&P chart, which intensifies the bearishness this pattern is known for, but market is quite oversold and a rally is due at some point. But the bears are firmly in charge and any play on the upside is a risky one.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The open gap on the S&P 500 between 1063 and 1067 has not been filled yet, but the gap on the Nasdaq, which is more noticeable, was almost filled yesterday before things went south again.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The dollar has pulled back over the last couple of days, after breaking out of bull flag formation last week. That pull back has now created a 2nd bull flag pattern so I would not be surprised if the dollar moves higher again in the next few trading days. That probably would not be good for stocks.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Back in April we were looking for a short-term pullback in bond yields after the 10-year T-note hit 4%. That short-term pullback turned into an outright collapse as the yields move down below 2.5% since then. They look due for a bounce (pull back in the F-fund.)  Chart provided courtesy of www.sentimentrader.com
That's why the bond fund has been the best
performing fund in 2010.
When bond prices go up when bond yields go down. |