Stocks had a wild morning on Wednesday as we hit the day's low and high within the first 90 minutes of trading, and it was about a 200-point swing from low to high - which has actually been the norm so far this year. When the dust settled the bulls had the edge and the Dow closed up 39-points while the S&P had an even larger gain percentage-wise.
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The S-fund has been lagging again, repeating the 2014 script where the S&P 500 / C-fund was the leader on the plus side. The I-fund posted another strong day while bonds and the F-fund were down.
Look for another wild open on Thursday as the ECB (European Central Bank) is set to announce a version of Quantitative easing. ECB President Mario Draghi will speak to the media at 8.30 AM ET today. As we've seen, the European markets have actually been leading this year and the concern may be that we've seen a "buy the rumor, sell the news" setting up.
The SPY (S&P 500 / C-fund) has not made any dramatic breakouts but it did nudge above the 50-day EMA, but nothing to write home about. The ECB decision should be the determining factor.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) moved about a point above the 50-day EMA. So far so good, but it is still vulnerable, particularly if the small caps of the Russell 2000 don't wake up.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Same story for the the Nasdaq 100 (QQQ) - minor breakout but nothing definitive yet.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
And the same for the Dow Transportation Index...
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) actually did make a pretty good move above the 50-day EMA, and this is the only chart in a bear market. As I mentioned above, the concern here is that when you run up to potentially good news (ECB announcing QE), there is often a "sell the news" reaction.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) were down and the short-term rising trading channel was broken. That's not a major problem, but it could be the start of a pullback to the old breakout line near 110.25. Either that or we are seeing a bull flag form. It's too early to say.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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