The market shrugged off the political fall-out that hit after the bell on Tuesday, but investors took a little break as the indices ended the day mixed. The Dow lost 89-points, the Transports lost 1%, but the S&P 500 was flat, while the Nasdaq and small caps rallied again.
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The bulls have been in charge over the last week and the bears got a headline that they could have used to push things lower, but they balked at the chance, although they did get a bit of a slowdown and we are still seeing the major indices holding at the technical long-term resistance levels on the charts.
Investors are still not sure of what to make of the Manafort and Cohen news that could put some heat on the President, but the reaction yesterday gives me the impression that the thought out there is -- the policies that have been working for the market will continue to work. It's the mid-term elections that could be the spoiler for those policies, but that's an eternity away for the stock market.
As far as seasonality goes, August has certainly outperformed so far, in relation to it's historical averages. There's a week left and then comes September, which happens to be the worst month historical average-wise. But one thing I have noticed in recent years, and it may go back further, is that the market seems to reverse course after Labor Day weekend. If we rallied up to Labor Day weekend, then post Labor Day weekend seems to struggle. If we decline into Labor Day weekend, then we tend to get rallies afterward.
Even in the anomalously bullish 2017 we were actually falling into that holiday weekend before exploding upward afterward.
On Friday Fed Chair Jerome Powell speaks on Monetary Policy in a Changing Economy at the Federal Reserve Bank of Kansas City Economic Policy Symposium, in Jackson Hole, Wyoming.
The S&P 500 / C-fund was dead-flat yesterday although it battled back from early losses, but the January highs have held and we're waiting to see if we will see one of those double top pullbacks.
The small caps (S-fund) surpassed the January highs a long time ago and have led on the upside all year, but it too is testing some longer term resistance. I put more weight into a double top pullback than this rising resistance, but still, there is a lot more room on the downside even if this trend is going to continue.
The Dow Transportation Index is in the same boat as the S&P 500 where it is hitting, and holding so far, at the January highs after it's big summer rally.
The EAFE (I-fund) remains in a bearish market but is getting a nice bear market rally off of the oversold conditions, and filling some open gaps along the way.
The AGG (bonds) continues to surprise on the upside as yields continue to slip lower in spite of the Fed's plans to continue to raise rates. So it sounds like everything is continuing, as I continue to say. To be continued.
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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The bulls have been in charge over the last week and the bears got a headline that they could have used to push things lower, but they balked at the chance, although they did get a bit of a slowdown and we are still seeing the major indices holding at the technical long-term resistance levels on the charts.
Investors are still not sure of what to make of the Manafort and Cohen news that could put some heat on the President, but the reaction yesterday gives me the impression that the thought out there is -- the policies that have been working for the market will continue to work. It's the mid-term elections that could be the spoiler for those policies, but that's an eternity away for the stock market.
As far as seasonality goes, August has certainly outperformed so far, in relation to it's historical averages. There's a week left and then comes September, which happens to be the worst month historical average-wise. But one thing I have noticed in recent years, and it may go back further, is that the market seems to reverse course after Labor Day weekend. If we rallied up to Labor Day weekend, then post Labor Day weekend seems to struggle. If we decline into Labor Day weekend, then we tend to get rallies afterward.
Even in the anomalously bullish 2017 we were actually falling into that holiday weekend before exploding upward afterward.
On Friday Fed Chair Jerome Powell speaks on Monetary Policy in a Changing Economy at the Federal Reserve Bank of Kansas City Economic Policy Symposium, in Jackson Hole, Wyoming.
The S&P 500 / C-fund was dead-flat yesterday although it battled back from early losses, but the January highs have held and we're waiting to see if we will see one of those double top pullbacks.
The small caps (S-fund) surpassed the January highs a long time ago and have led on the upside all year, but it too is testing some longer term resistance. I put more weight into a double top pullback than this rising resistance, but still, there is a lot more room on the downside even if this trend is going to continue.
The Dow Transportation Index is in the same boat as the S&P 500 where it is hitting, and holding so far, at the January highs after it's big summer rally.
The EAFE (I-fund) remains in a bearish market but is getting a nice bear market rally off of the oversold conditions, and filling some open gaps along the way.
The AGG (bonds) continues to surprise on the upside as yields continue to slip lower in spite of the Fed's plans to continue to raise rates. So it sounds like everything is continuing, as I continue to say. To be continued.
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.
