Stocks opened higher on Monday but sellers stepped in right away and pulled the indices down sharply in early trading. Then at about noon ET the dip buyers showed up again giving us sort of a "V" bottom day, but we still ended with modest losses across the board. It was a fairly dramatic day with those intraday swings. Down 414-points at the lows, and up 129 at the highs, the Dow ended the day down 207-points, but that 544-point swing made for quite a day.
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After another Friday rally in 2019 last week, it was another weak start to a new week. That's been the pattern so it is still going. It's all based on a potential trade deal and investors' and traders' FOMO (fear of missing out) when a deal is eventually announced, but we have no idea yet what kind of deal it will be. Will it be as favorable as President Trump wants? Will it be a disappointing deal that the market will not like? The fact that we seemed to have rallied on a deal being made means it may already be priced in, so what happens if something goes wrong and no deal is made?
I think the market could be getting ahead of itself, but clearly yesterday's reversal off the morning lows shows that some folks do not want to be out of stocks when a deal is announced.
We get the February Jobs Report on Friday and estimates are looking for a gain of about 175,000 jobs, an unemployment rate of 3.8%, and wage growth of 0.3%.
The S&P 500 (C-fund) opened sharply higher at the open on Monday, hit that resistance line where prior highs have failed, and pulled back. Dip buyers did show up again and we did see a close well off the lows so there's some positive momentum heading into Tuesday, but that 2800 - 2815 level has been tough to overcome over the last several months so we'll see if the bears defend it.
The DWCPF (S-fund) was down more sharply but it too saw decent buying into the close so the bulls are not dead yet.
The Dow Transportation Index also posted a small comeback yesterday, but it did close below Friday's low making it a negative outside reversal day, which can be negative going forward. The 200-day EMA did provide some support so the bulls were happy to buy at that level.
The EFA (I-fund) was down and found some support at a rising support line, so it remained above its 200-day average.
The dollar was up sharply early, but it lost most of those gains by the close, although it did leave an open gap near 25.75. That looks "peaky" but the larger trend is still up.
The AGG (F-fund) was up on the day with investors finally showing a little fear with the VIX up 8%, so it was likely a move to safety. It remains below the rising support line so the chart looks a little bearish here until it can recapture that 107 area.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
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After another Friday rally in 2019 last week, it was another weak start to a new week. That's been the pattern so it is still going. It's all based on a potential trade deal and investors' and traders' FOMO (fear of missing out) when a deal is eventually announced, but we have no idea yet what kind of deal it will be. Will it be as favorable as President Trump wants? Will it be a disappointing deal that the market will not like? The fact that we seemed to have rallied on a deal being made means it may already be priced in, so what happens if something goes wrong and no deal is made?
I think the market could be getting ahead of itself, but clearly yesterday's reversal off the morning lows shows that some folks do not want to be out of stocks when a deal is announced.
We get the February Jobs Report on Friday and estimates are looking for a gain of about 175,000 jobs, an unemployment rate of 3.8%, and wage growth of 0.3%.
The S&P 500 (C-fund) opened sharply higher at the open on Monday, hit that resistance line where prior highs have failed, and pulled back. Dip buyers did show up again and we did see a close well off the lows so there's some positive momentum heading into Tuesday, but that 2800 - 2815 level has been tough to overcome over the last several months so we'll see if the bears defend it.
The DWCPF (S-fund) was down more sharply but it too saw decent buying into the close so the bulls are not dead yet.
The Dow Transportation Index also posted a small comeback yesterday, but it did close below Friday's low making it a negative outside reversal day, which can be negative going forward. The 200-day EMA did provide some support so the bulls were happy to buy at that level.
The EFA (I-fund) was down and found some support at a rising support line, so it remained above its 200-day average.
The dollar was up sharply early, but it lost most of those gains by the close, although it did leave an open gap near 25.75. That looks "peaky" but the larger trend is still up.
The AGG (F-fund) was up on the day with investors finally showing a little fear with the VIX up 8%, so it was likely a move to safety. It remains below the rising support line so the chart looks a little bearish here until it can recapture that 107 area.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
