Stocks were very flat on the Monday before Election Day as the Dow lost 24-points while the S&P 500 lost 24-cents. There was some late afternoon selling triggered by, of all things, a sharp decline in the price of oil.
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Small caps were flat while the I-fund was down fairly sharply, and bonds were down slightly.
The Saudis actually dropped the price of oil for the U.S. and that sent the price of oil down to below $79 a barrel, and the stock market fell in sympathy. Is the demand for oil going to be the catalyst for the stock market after the election?
The SPY (S&P 500 / C-fund) moved to new all-time highs early on Monday, but it backed off a bit falling below the breakout point. There is an open gap that I believe will get filled this week, but the momentum is up, and investors may be happy to jump on any dip. The only thing that might change that would be a surprise in the mid-term election results or a maybe a collapse in the price of oil.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) has been moving virtually straight up for 3-weeks, but yesterday's week close may have produced a small negative reversal day.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
There is not an open gap on the Wilshire 4500 chart, but Russell 2000 has one near 1160 that could easily get filled this week. The question is whether investors will jump on that dip on not.
Chart provided courtesy of www.stockcharts.comm, analysis by TSP Talk
The EFA (EAFE Index / I-fund) fell below some key support again, after rallying above the old resistance on Friday. It is back below the descending resistance line and the 50-day EMA. That's slightly bearish but the catalyst for the big rally on Friday was Japan, and their market were closed yesterday because of a holiday.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds/ (F-fund) were down but the old August highs did produce a low on Monday. It does remain in the descending trading channel so until that breaks we have to assume the downtrend will continue.
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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