It wasn't exactly a reversal day yesterday, but the Dow (-28-points) and the S&P 500 (-1) gave back Tuesday's gains, and both days would be considered flat and things are getting quiet as we head toward the holiday trading period and continue to flirt with all-time highs . The small caps led on the upside while the I-fund slipped on another rally in the dollar, and the Transports fell after FedEx's weak earnings report. Bonds were down.
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The impeachment process is having little effect on stocks, or so it seems, as the end game seems inevitable. The same thing happened during the Clinton impeachment where stocks did just fine. If anything, the market seems to like Washington being distracted by their politics and not in Wall Street's business.
After the bell yesterday Micron reported a strong earnings report and those tech stocks, particularly the semiconductors, have been the leaders this year so the futures were moving higher on those positive results.
If you're trying to time this end of December seasonal period, it's never as simple as the averages make it seem. What should you believe? The average over the last 30 years which shows very positive action after the 20th of the month - although I don't see any 100%'s on this chart. One is about 94% however, on December 30th.
Chart provided courtesy of www.sentimentrader.com
In more recent years however, the S&P 500 has actually been negative after the 18th and into the end of the year - and it didn't matter if the S&P was up or down for that full year, or if December was up going into those last 10+ days of the month, or not.
It's as if investors see the trends, just as we watch closely, and once everyone is on board with what seems to be the norm, the market decides to do the opposite of that trend.
The latter half of December used to one of the few "givens" of the year, and now even that seems to be questionable - for now. It was similar with what we used to call the "January Effect" where small caps outperformed in January, but investors caught onto that so they started to get the jump on the small caps in December, resulting in small caps starting to outperform in December instead.
Just when you think you've figured it out, the game starts to change. It reminds me of the line from a Greek philosopher who said, "Change is the only constant in life."
The S&P 500 (C-fund) was flat again and the very tight range recently has created a bit of a flat top formation. It's tough to consider anything but seasonality during this time of year, and so far that has worked in 2019, but as we talked about above, it hasn't been as easy as that in recent years.
The DWCPF (S-fund) had a nice day adding another 0.2% and making another 52-week high, but it is still below the all-time high of just above 1500 from back in the summer of 2018. It's about 10-12 points away and that makes it a little vulnerable to a double top pullback in the coming days / weeks.
The Dow Transportation Index was down sharply on the FedEx earnings report and the technical picture is a bit of a quandary. That looks like a bearish head and shoulders pattern forming, but if firmly bounced off the 200-day EMA twice in recent weeks, and is also above the 50-day EMA.
The EFA / I-fund was down for a second straight day after the dollar rallied for a 4th straight day. The overhead resistance is obvious, but the resistance line is rising. There are some open gaps below that are within that channel that may want to get filled before new highs are made again.
The AGG (F-fund / bonds) fell sharply on Wednesday as this bull flag continues to form. The 50-day EMA held up near the lows yesterday, and while the bull flag gives this a bullish outlook for bonds in my eyes, the action this week has been anything but bullish.
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 TSP Talk - Market Commentary
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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[TD="align: center"] Daily TSP Funds Return
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[TD][/TD]
[TD="align: center"]
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[/TABLE]
The impeachment process is having little effect on stocks, or so it seems, as the end game seems inevitable. The same thing happened during the Clinton impeachment where stocks did just fine. If anything, the market seems to like Washington being distracted by their politics and not in Wall Street's business.
After the bell yesterday Micron reported a strong earnings report and those tech stocks, particularly the semiconductors, have been the leaders this year so the futures were moving higher on those positive results.
If you're trying to time this end of December seasonal period, it's never as simple as the averages make it seem. What should you believe? The average over the last 30 years which shows very positive action after the 20th of the month - although I don't see any 100%'s on this chart. One is about 94% however, on December 30th.
Chart provided courtesy of www.sentimentrader.com
In more recent years however, the S&P 500 has actually been negative after the 18th and into the end of the year - and it didn't matter if the S&P was up or down for that full year, or if December was up going into those last 10+ days of the month, or not.
It's as if investors see the trends, just as we watch closely, and once everyone is on board with what seems to be the norm, the market decides to do the opposite of that trend.
The latter half of December used to one of the few "givens" of the year, and now even that seems to be questionable - for now. It was similar with what we used to call the "January Effect" where small caps outperformed in January, but investors caught onto that so they started to get the jump on the small caps in December, resulting in small caps starting to outperform in December instead.
Just when you think you've figured it out, the game starts to change. It reminds me of the line from a Greek philosopher who said, "Change is the only constant in life."
The S&P 500 (C-fund) was flat again and the very tight range recently has created a bit of a flat top formation. It's tough to consider anything but seasonality during this time of year, and so far that has worked in 2019, but as we talked about above, it hasn't been as easy as that in recent years.
The DWCPF (S-fund) had a nice day adding another 0.2% and making another 52-week high, but it is still below the all-time high of just above 1500 from back in the summer of 2018. It's about 10-12 points away and that makes it a little vulnerable to a double top pullback in the coming days / weeks.
The Dow Transportation Index was down sharply on the FedEx earnings report and the technical picture is a bit of a quandary. That looks like a bearish head and shoulders pattern forming, but if firmly bounced off the 200-day EMA twice in recent weeks, and is also above the 50-day EMA.
The EFA / I-fund was down for a second straight day after the dollar rallied for a 4th straight day. The overhead resistance is obvious, but the resistance line is rising. There are some open gaps below that are within that channel that may want to get filled before new highs are made again.
The AGG (F-fund / bonds) fell sharply on Wednesday as this bull flag continues to form. The 50-day EMA held up near the lows yesterday, and while the bull flag gives this a bullish outlook for bonds in my eyes, the action this week has been anything but bullish.
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 TSP Talk - Market Commentary
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.
