Stocks rallied Thursday despite a negative open. The tariff situation is ongoing but we got another positive report on inflation yesterday and that sent yields lower, helping stocks move higher. New highs are getting closer and that may be when the real test begins. Small caps lagged and the I-fund led thanks to another decline in the dollar.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
If you're in stocks, you're in cruse control wondering how long it can last. If you're out of stocks you may be running out of patience looking for a pullback. And if you're writing about the stock market action like I am, you're running out of ways to say that stocks are grinding higher and climbing the wall of worry. There, I just said it. Again.
Update: Just after completing this commentary, a news headline popped up and the stock market futures started to sell off. Israel’s defense minister Israel Katz declared a special state of emergency following an Israeli attack on Iran. I'll just post a link to the article, but this may be the catalyst for a double top pullback, even though the S&P 500 is just short of its previous highs.
Israel’s defense minister announces ‘special situation’ after Israel attacks Iran:
The PPI report (producer prices) came it lower than expected sending yields down and here is another test for the 10-year Treasury Yield at the support of the ascending channel. It may take a weak economic report to send this lower, now that most of the inflation related economic reports are out for a while. It makes for cheaper lending, but the stock market may wonder why it's falling below support again. We had a couple of tariff tantrum breakdowns in recent months, so will it take something like that to break support again?
The S&P 500 (C-fund) continues to grind higher (he said it again!) and while I am not crazy about the rising resistance and wedge-like formations since they have a tendency to breakdown, it's likely this will try to get closer to that prior high before a possible pullback ensues. The bulls are still in charge but the risk / reward ratio may be getting closer to the riskier side with each positive day.
The price of oil has been making its way higher since the dramatic decline into the mid-50's over the last month or two. There is a big open gap up above 70 but it is testing the resistance at the 200-day EMA again, after failing in early April. Rising oil can be a sign of a strengthening economy, and we have seen some signs of that, but also summer driving demand and possible supply issues could also be playing a role.
I mentioned the TSP's Bitcoin Mutual Fund a few weeks ago. It looks like it needs to make a move above 32 soon because lower highs have not been good to this fund in the past. Right now it's in the process of one of those double top pullbacks, which could be shallow or more sinister - it's tough to say.
The DWCPF (S-fund) pulled back but closed off the lows after finding support at the prior peak. The recent dip comes just as the 50 and 200 day averaged cross, which is typical. It could come down to test those averages, but for now, yesterday's low remains the immediate support.
The ACWX (I-fund) just goes up everyday. That's 7 days in a row and 8 of the 9 trading days in June. The trend is its friend.
BND (bonds / F-fund) closed above its descending resistance for a second straight day, and it closed above the prior high , potentially changing the trend. However, with the 10-year Treasury Yield (see chart up top) currently at support, today may be a good test for the F-fund.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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 may use additional methods and strategies to determine fund positions.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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If you're in stocks, you're in cruse control wondering how long it can last. If you're out of stocks you may be running out of patience looking for a pullback. And if you're writing about the stock market action like I am, you're running out of ways to say that stocks are grinding higher and climbing the wall of worry. There, I just said it. Again.
Update: Just after completing this commentary, a news headline popped up and the stock market futures started to sell off. Israel’s defense minister Israel Katz declared a special state of emergency following an Israeli attack on Iran. I'll just post a link to the article, but this may be the catalyst for a double top pullback, even though the S&P 500 is just short of its previous highs.
Israel’s defense minister announces ‘special situation’ after Israel attacks Iran:
The PPI report (producer prices) came it lower than expected sending yields down and here is another test for the 10-year Treasury Yield at the support of the ascending channel. It may take a weak economic report to send this lower, now that most of the inflation related economic reports are out for a while. It makes for cheaper lending, but the stock market may wonder why it's falling below support again. We had a couple of tariff tantrum breakdowns in recent months, so will it take something like that to break support again?
The S&P 500 (C-fund) continues to grind higher (he said it again!) and while I am not crazy about the rising resistance and wedge-like formations since they have a tendency to breakdown, it's likely this will try to get closer to that prior high before a possible pullback ensues. The bulls are still in charge but the risk / reward ratio may be getting closer to the riskier side with each positive day.
The price of oil has been making its way higher since the dramatic decline into the mid-50's over the last month or two. There is a big open gap up above 70 but it is testing the resistance at the 200-day EMA again, after failing in early April. Rising oil can be a sign of a strengthening economy, and we have seen some signs of that, but also summer driving demand and possible supply issues could also be playing a role.
I mentioned the TSP's Bitcoin Mutual Fund a few weeks ago. It looks like it needs to make a move above 32 soon because lower highs have not been good to this fund in the past. Right now it's in the process of one of those double top pullbacks, which could be shallow or more sinister - it's tough to say.
The DWCPF (S-fund) pulled back but closed off the lows after finding support at the prior peak. The recent dip comes just as the 50 and 200 day averaged cross, which is typical. It could come down to test those averages, but for now, yesterday's low remains the immediate support.
The ACWX (I-fund) just goes up everyday. That's 7 days in a row and 8 of the 9 trading days in June. The trend is its friend.
BND (bonds / F-fund) closed above its descending resistance for a second straight day, and it closed above the prior high , potentially changing the trend. However, with the 10-year Treasury Yield (see chart up top) currently at support, today may be a good test for the F-fund.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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 may use additional methods and strategies to determine fund positions.
