Stocks ended the day mostly flat yesterday, but spent most of the day in negative territory. The action was not bad considering the string of positive days we have seen, but are buyers drying up or just taking a break? The Dow lost 10-points and losses were minor in most of the broader indices.
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Stocks rebounded late, and the dollar closed weakly, which is probably why the I-fund lagged. We could see some of that 0.18% loss paid back on Tuesday.
The SPY (S&P 500 / C-fund) paused a bit and it is just a waiting game now to see if this is one of those 2 to 3 days dips that needs to be bought in a bull market, or if this is going to turn into more of a pullback.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-Fund) made a minor negative reversal day, but it still held above the March highs support line (old resistance). That's a good sign but this index has to be a little tired here and may need another rest.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq 100 (QQQ) has been consolidating for the last 2+ weeks. It's flat lining here and that is usually bullish in a rising trend. But like the small caps, this index has come a long way in a short period of time, and a little pullback would not be a surprise.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index hit its old closing highs last week and on Monday rolled over before making a new high. That is a concern, but it closed off the lows and has rising support underneath it. No alarms here yet, but watch that 8100 area. It needs to hold.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The dollar fell again on Monday and the new downtrend continues to develop. The Fed said they were not overly concerned with inflation so I guess investors took that as, if the Fed isn't going to worry about inflation, perhaps they won't work to prevent it. Yesterday was the third close below the 50-day EMA for the dollar.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Bonds were up early but closed weakly and the IEF remains in its little trading range between 102.25 and 103.25. As I have been saying, I would prefer to see this range break one way or the other before declaring much an opinion on bonds. I do like that the 50-day EMA is holding here, making me think it could break to the upside, but I'm staying neutral on bonds until it does break.
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
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