Stocks struggled again on Monday as the Dow shed 45-points while the S&P 500 and Nasdaq have yet to have a positive close in 2014. Small caps lagged and investors turned to bonds.
[TABLE="width: 80%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 176"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0210%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.18%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.25%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.58%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.28%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 (SPY) continues its worst start to a new year since 2008, but the loss is only a little over 1% after a 30% plus year in 2013. It's certainly not anything to worry about yet, except maybe in the context of the January Barometer we've been talking about - i.e. as goes January, so goes the year. We do get the jobs report this coming Friday so we'll see how investors want to position themselves in front of that important report, which could end the decline... or accelerate it. The PMO indicator is close to crossing below the 10-day EMA which is a sell signal for that indicator.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps had a bad day on Monday and created a negative outside day. I'm sure its happened before, but that inside day followed by an outside day looks rather odd and is probably trying to tell us something. Typically inside and outside days can be reversal patterns, but would that be a reversal from the recent pullback, or from the 2013 rally? The negative outside day would suggest more downside at least some time today, although that doesn't mean it will close lower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index lost over 1% on the day and this market leader is now testing the bottom if its trading channel, which is looking like a bearish rising wedge.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar started the year with some strength but the gap up last Thursday created a large open gap that will be a short-term target. This UUP chart shows that the dollar has broken above the pennent resistance line (black), but you know what we say about the pennants or wedges? We tend to see fake-outs before they break in the other direction. If that is the case, that would help the open gap get filled. The I-fund would benefit, in relation to U.S. indices, from any pullback in the dollar.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Today (Tuesday) is the 4th trading day in January and the seasonality chart actually starts a weaker than average 4-day stretch today. Of course the S&P 500 has been down the first three days of the month despite the positive seasonality, so perhaps we're just going through a contrary seasonality phase? I would assume that the weakness during day 4 to 7 may be related to profit taking after the gains from the strong seasonal period from the end of December through early January. This year there won't be any January profits to pocket.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bond rallied again and the 7 to 10 year chart filled an open gap while the 20+ year chart is attempting to. There is still overhead resistance in a few forms including trend lines and moving averages, so the test of the recent relief rally in bonds starts any day now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This Friday we get the December jobs report. Consensus estimates are looking for approximately 197,000 new jobs being created, and an unemployment rate of 7.0%. What do you think? We have our monthly jobs report contest going on in the Forum.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey and its System. 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.
[TABLE="width: 80%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 176"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0210%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.18%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.25%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.58%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.28%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 (SPY) continues its worst start to a new year since 2008, but the loss is only a little over 1% after a 30% plus year in 2013. It's certainly not anything to worry about yet, except maybe in the context of the January Barometer we've been talking about - i.e. as goes January, so goes the year. We do get the jobs report this coming Friday so we'll see how investors want to position themselves in front of that important report, which could end the decline... or accelerate it. The PMO indicator is close to crossing below the 10-day EMA which is a sell signal for that indicator.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps had a bad day on Monday and created a negative outside day. I'm sure its happened before, but that inside day followed by an outside day looks rather odd and is probably trying to tell us something. Typically inside and outside days can be reversal patterns, but would that be a reversal from the recent pullback, or from the 2013 rally? The negative outside day would suggest more downside at least some time today, although that doesn't mean it will close lower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index lost over 1% on the day and this market leader is now testing the bottom if its trading channel, which is looking like a bearish rising wedge.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar started the year with some strength but the gap up last Thursday created a large open gap that will be a short-term target. This UUP chart shows that the dollar has broken above the pennent resistance line (black), but you know what we say about the pennants or wedges? We tend to see fake-outs before they break in the other direction. If that is the case, that would help the open gap get filled. The I-fund would benefit, in relation to U.S. indices, from any pullback in the dollar.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Today (Tuesday) is the 4th trading day in January and the seasonality chart actually starts a weaker than average 4-day stretch today. Of course the S&P 500 has been down the first three days of the month despite the positive seasonality, so perhaps we're just going through a contrary seasonality phase? I would assume that the weakness during day 4 to 7 may be related to profit taking after the gains from the strong seasonal period from the end of December through early January. This year there won't be any January profits to pocket.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bond rallied again and the 7 to 10 year chart filled an open gap while the 20+ year chart is attempting to. There is still overhead resistance in a few forms including trend lines and moving averages, so the test of the recent relief rally in bonds starts any day now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This Friday we get the December jobs report. Consensus estimates are looking for approximately 197,000 new jobs being created, and an unemployment rate of 7.0%. What do you think? We have our monthly jobs report contest going on in the Forum.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey and its System. 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.
