Stocks ended the day with slight to moderate gains depending where you looked. The Comey testimony turned out to be basically a non-event as far as the market goes. There were some intraday swings on the Dow which was up about 90-points at the highs and down points 35-points at the lows, but the battle was a stalemate and at the end of the day the Dow was up 9-points and the S&P was up less than 1. The Nasdaq on the other hand, saw more meaningful gains.
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Whether it was bargain hunting or just reallocating, the small caps were the ones that won the day as we saw the Russell 2000 gain well over 1%, while our DWCPF (small / mid-cap fund) gained about 0.8%. The EFA was down slightly.
After the market closed there was a bit of a surprise out of the UK as the election was a tighter than expected, according to the exit polls, which means a possible hung Parliament. That could change by the time you read this, but the tight race did send the Pound down and so we could see some movement in the European markets today. The U.S. futures did open down modestly at 6 PM ET on Thursday.
This will be another quick commentary. Not because I am going anywhere, but rather the action has been so slow that's there's very little to talk about technically. The next catalysts for the market may be any unrest from the U.K. election, and of course next week's FOMC meeting.
The SPY (S&P 500 / C-fund) ended the day about where it started. That was a lot of of non-conviction from both sides as the market ends this week still trying to digest last week's big gains.
The DWCPF (S-fund) reached up toward new highs and seem to be investors choice of the day as money moves from one sector to another. That looks like a cup and handle formed although the handle is on the small side which could mean it needs a little more consolidating before it breaks out.
I've been talking about the beaten down price of copper, which could be a warning sign for the economy.
My friend Oscar Carboni took a different look. He zoomed out and looked at the weekly chart and lo and behold, there a nice big 2-year cup and handle formation here, which could be a major bullish sign - if and when it breaks to the upside.
The price of oil is also a good indicator of economic strength, but right now high inventories may be distorting that analysis. Like copper, oil has been in a down trend all year. That hasn't hurt the stock market, but it hasn't helped either.
The AGG (Bonds / F-fund) fell early and filled that first open gap and found support where we might expect on the first test, about 109.50.
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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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