Stocks opened higher on Thursday and did a pretty good job remaining in positive territory, and then closed at the highs. The Dow gained 70-points while percentage -wise the broader indices did even better.
We've seen some strong earnings reports coming in from the big names like Intel, Google, and Netflix, and that has the Nasdaq on a roll. Google's report came after the close Thursday and the Nasdaq futures are flying again. The S&P 500 futures haven't been as impacted.
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The S-fund fund lagged again, and bonds were flat.
The SPY (S&P500 / C-fund) has been riding high for the last week or so and there's now two open gaps in its wake. There's some overhead resistance where the prior highs connect. We've seen 4 closes above the 50-day EMA now, which is a plus, but we're really still looking for some kind of breakout to the upside to get out of the long trading range, otherwise the bears may come in and at least try to fill those gaps. The angle of incline is not sustainable for very much longer, but the question will be how quickly the folks who are stuck on the sidelines buy any dips? They must be getting a little frustrated by now and may be running out of patience.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (S-fund) was up Thursday but it hasn't made much headway since filling that small open gap near 1120 on Tuesday. So it is lagging a bit, but it has also closed above the 50-day EMA for 4 straight days.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE index / I-fund) opened another small gap on Thursday and is nearing the descending resistance line. You can look at this and say that it has come a long way in a very short amount of time, but it is also where it was back in April so with the Greece situation behind us, perhaps it is ready to challenge the May highs again?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The price of oil has been backing off sharply after the recent rally back over $60 a barrel. As we've talked about before, you can look at falling oil prices as a glass half empty, or half full. Generally if oil demand is down, it means there could be a hiccup in the economy. But, falling oil prices also puts a few bucks in consumers' pockets which should help the economy - once the price of gasoline is impacted, and there is a lag. This price drop however, could have something to do with the nuke deal we've got pending with Iran - I don't know. But if that's the case it beats the weakening economy option.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) rallied right up to the resistance area that we have been watching: The 200-day EMA and the open gap. There could be some wiggle room up to the 50-day EMA but the bond bears may be licking their chops if it gets that high.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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