It was a slow day for stocks on Tuesday with the indices trading in very narrow price ranges and the three majors closed just south of break-even with the Dow losing just 13-points. This year's market leaders, the smalls caps and the Transportation Index, were hit a little harder yesterday and they have actually lagged more recently finding themselves where they were two and three weeks ago respectively.
[TABLE="align: center"]
[TR]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[TD][/TD]
[TD="align: center"]
[/TD]
[/TR]
[/TABLE]
Some very late selling took the Dow, S&P 500, and Nasdaq off slight gains to put them in the red for the day, as you can see those charts above, but it isn't clear whether we are seeing a slight pause in what has been a massive rally to start this year, or if we're seeing the start of something a little more menacing.
As you'll see in the charts down below, the indices are in tricky spots with potential major overhead resistance on the S&P 500, and the Dow Transportation Index falling back below its 200-day EMA.
There's the possibility of a trade deal in the air but is there anyone, at this point, that will be surprised by it? Or would the surprise be if the deal is not ideal for the U.S. companies, or if there was no deal made at all? That could be a big disappointment for the market so it feels like most of the risk is on the downside since a deal seems to already be priced in.
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%.
Administrative Note: It was a slow day for stocks so it sound like a good day to announce a new section on TSP Talk that we are going to try out called Retirement Talk with Tony. It will be retirement related articles from Tony Kendzior: CLU, CHFC, Retirement Planner. We've made a mutual agreement where Tony will provide free retirement content for us on TSP Talk, and in exchange we will give him a link to his financial / retirement planning services website for anyone who may be interested in finding out more. It looked like valuable information to me, and since retirement is not my area of expertise, I thought it could be a good fit for us so let's see how it goes. I'd like to welcome Tony to our team, and I hope you like the new material!
The S&P 500 (C-fund) touched the highs from November and late October and backed off this week, and although it is not shown, the high in March 2018, and later in June, was also near 2800, where the resistance seems to be toughest. The inverted head and shoulders pattern might be suggesting a pullback that could try to fill in that right shoulder in the coming weeks. There's no rule that says it must do that, but it is a common technical pattern.
The DWCPF (S-fund) has recently broken below some rising support which may suggest the start of a pullback, but the angle of incline has been fairly sharp and it could just be adjusting that some. It is still above the major moving averages and as long as it can maintain that, the bulls will be in charge. Still, that could mean another 50-points on the downside if it tests the 50 and / or 200 day averages.
The Dow Transportation Index is the one that is wobbling right now as yesterday's losses pushed it to the level it was at back on February 11. It closed just below the 200-day EMA yesterday, which isn't a deal breaker on the first day, but it failed to hold above the 200-day Simple average and the bulls will need to get the work to improve the technical picture here.
The EFA (I-fund) has been holding up fairly well of late, but it is testing the bottom of a rising wedge - a pattern that does have a tendency to break down.
The German DAX, one of the major components of the I-fund index, has rallied with U.S. stocks but it is now up against its 200-day EMA and the lows from last spring which makes it a double dose of potential resistance.
The AGG (F-fund) was up on the day but that looks like a bear flag forming, and with it falling below its rising support line last week, it may be on the way down to a potential test of that 50-day EMA (purple.)
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.
[TABLE="align: center"]
[TR]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[TD][/TD]
[TD="align: center"]
[/TR]
[/TABLE]
Some very late selling took the Dow, S&P 500, and Nasdaq off slight gains to put them in the red for the day, as you can see those charts above, but it isn't clear whether we are seeing a slight pause in what has been a massive rally to start this year, or if we're seeing the start of something a little more menacing.
As you'll see in the charts down below, the indices are in tricky spots with potential major overhead resistance on the S&P 500, and the Dow Transportation Index falling back below its 200-day EMA.
There's the possibility of a trade deal in the air but is there anyone, at this point, that will be surprised by it? Or would the surprise be if the deal is not ideal for the U.S. companies, or if there was no deal made at all? That could be a big disappointment for the market so it feels like most of the risk is on the downside since a deal seems to already be priced in.
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%.
Administrative Note: It was a slow day for stocks so it sound like a good day to announce a new section on TSP Talk that we are going to try out called Retirement Talk with Tony. It will be retirement related articles from Tony Kendzior: CLU, CHFC, Retirement Planner. We've made a mutual agreement where Tony will provide free retirement content for us on TSP Talk, and in exchange we will give him a link to his financial / retirement planning services website for anyone who may be interested in finding out more. It looked like valuable information to me, and since retirement is not my area of expertise, I thought it could be a good fit for us so let's see how it goes. I'd like to welcome Tony to our team, and I hope you like the new material!
The S&P 500 (C-fund) touched the highs from November and late October and backed off this week, and although it is not shown, the high in March 2018, and later in June, was also near 2800, where the resistance seems to be toughest. The inverted head and shoulders pattern might be suggesting a pullback that could try to fill in that right shoulder in the coming weeks. There's no rule that says it must do that, but it is a common technical pattern.
The DWCPF (S-fund) has recently broken below some rising support which may suggest the start of a pullback, but the angle of incline has been fairly sharp and it could just be adjusting that some. It is still above the major moving averages and as long as it can maintain that, the bulls will be in charge. Still, that could mean another 50-points on the downside if it tests the 50 and / or 200 day averages.
The Dow Transportation Index is the one that is wobbling right now as yesterday's losses pushed it to the level it was at back on February 11. It closed just below the 200-day EMA yesterday, which isn't a deal breaker on the first day, but it failed to hold above the 200-day Simple average and the bulls will need to get the work to improve the technical picture here.
The EFA (I-fund) has been holding up fairly well of late, but it is testing the bottom of a rising wedge - a pattern that does have a tendency to break down.
The German DAX, one of the major components of the I-fund index, has rallied with U.S. stocks but it is now up against its 200-day EMA and the lows from last spring which makes it a double dose of potential resistance.
The AGG (F-fund) was up on the day but that looks like a bear flag forming, and with it falling below its rising support line last week, it may be on the way down to a potential test of that 50-day EMA (purple.)
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.
