Stocks struggled early on Monday but fought back to close off the lows, although with mixed results. The Dow gained a solid 191-points despite Apple's weakness weighing on it. The S&P 500 also had a good day gaining back most of Friday's moderate losses. Small caps and the Transportation Index were flat on the day and the Nasdaq lagged with that pressure from Apple, as well as Amazon.
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[SUB] Yesterday's trading volume was quite light and I assume today will be similar with almost a holiday feel to the trading because of it being Election Day. The election results will be announced in later tonight, after the markets close, so any reaction will be on Wednesday. If there are going to be any fireworks, tomorrow will likely be the day - unless there are a lot of "too close to call" type of races.
Technically the indices are still stalled under the 200-day EMAs after the strong rally off the recent lows. The "easy money" may have been made, although if the S&P 500 can recapture the 200-day EMA there could be another wave of less concerned technical traders doing some buying with that roadblock out of the way. That's a big if because getting back above the 200 EMA can be tough once that descending trend is established below it.
With interest rates rising and higher bond yields there is a new alternative to stocks - something we haven't seen in a long time. The G-fund is now paying 3.125% annually and going back 5 years we haven't seen an annual return above 2.3% so 3.13% is a change that could make things "different this time."
G-fund returns:
The last time the G-fund paid more than 3.1% was back in 2008 when it gained 3.75% for the year.
David Stockman is back in the prediction game. If you recall, David, who served as President Reagan's Office of Management and Budget director, predicted a quick 25% decline in stocks if Trump was elected in 2016. That didn't work out for him. For some reason he still has a platform and he's saying a 40% decline in stocks has started. Is that a buy signal?
If interested, you can read his prediction here.
[/SUB]
[SUB]
The S&P 500 / C-fund moved back up to basically recapture Friday's losses, but it stayed below the 200-day EMA and the open gap below 2700 remains open. It still looks like a potential "V" bottom but it must recapture that 200-day EMA soon to keep that theory alive.
The year to date chart shows some of the key levels that could make or break the next big move for the S&P 500.
The DWCPF (S-fund) was flat on the day and rather than the 200-day EMA being a factor right now, the imminent resistance is the 20-day EMA (green).
The EAFE Index (I-fund) is the road map of a bear market and what the S&P 500 is trying to avoid. Once below the 100-day EMA, it's not always easy to get back above it.
The Dow Transportation Index is in the same situation as the small caps chart - the 20-day EMA is the immediate obstacle.
The Financials had a good day yesterday as bond yields have lifted above 3.2% again. But it too is below the 200-day EMA, and has been for a while. Plus there is an open gap down below that seems destined to be filled eventually barring any explosive post-election rally like 2016.
The AGG (bonds / F-fund) was up slightly on the day but it is languishing below the bear flag. The early October low was tested and held so far this month, and that's potentially a positive - as long as it holds.
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
[/SUB][SUB] Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
[/SUB]
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.
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[TD="align: center"] Daily TSP Funds Return
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[TD="align: right"][/TD]
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[/TD]
[TD]
[/TD]
[TD="align: center"]
[/TR]
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[SUB] Yesterday's trading volume was quite light and I assume today will be similar with almost a holiday feel to the trading because of it being Election Day. The election results will be announced in later tonight, after the markets close, so any reaction will be on Wednesday. If there are going to be any fireworks, tomorrow will likely be the day - unless there are a lot of "too close to call" type of races.
Technically the indices are still stalled under the 200-day EMAs after the strong rally off the recent lows. The "easy money" may have been made, although if the S&P 500 can recapture the 200-day EMA there could be another wave of less concerned technical traders doing some buying with that roadblock out of the way. That's a big if because getting back above the 200 EMA can be tough once that descending trend is established below it.
With interest rates rising and higher bond yields there is a new alternative to stocks - something we haven't seen in a long time. The G-fund is now paying 3.125% annually and going back 5 years we haven't seen an annual return above 2.3% so 3.13% is a change that could make things "different this time."
G-fund returns:
The last time the G-fund paid more than 3.1% was back in 2008 when it gained 3.75% for the year.
David Stockman is back in the prediction game. If you recall, David, who served as President Reagan's Office of Management and Budget director, predicted a quick 25% decline in stocks if Trump was elected in 2016. That didn't work out for him. For some reason he still has a platform and he's saying a 40% decline in stocks has started. Is that a buy signal?
[/SUB]
[SUB]
The S&P 500 / C-fund moved back up to basically recapture Friday's losses, but it stayed below the 200-day EMA and the open gap below 2700 remains open. It still looks like a potential "V" bottom but it must recapture that 200-day EMA soon to keep that theory alive.
The year to date chart shows some of the key levels that could make or break the next big move for the S&P 500.
The DWCPF (S-fund) was flat on the day and rather than the 200-day EMA being a factor right now, the imminent resistance is the 20-day EMA (green).
The EAFE Index (I-fund) is the road map of a bear market and what the S&P 500 is trying to avoid. Once below the 100-day EMA, it's not always easy to get back above it.
The Dow Transportation Index is in the same situation as the small caps chart - the 20-day EMA is the immediate obstacle.
The Financials had a good day yesterday as bond yields have lifted above 3.2% again. But it too is below the 200-day EMA, and has been for a while. Plus there is an open gap down below that seems destined to be filled eventually barring any explosive post-election rally like 2016.
The AGG (bonds / F-fund) was up slightly on the day but it is languishing below the bear flag. The early October low was tested and held so far this month, and that's potentially a positive - as long as it holds.
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
[/SUB][SUB] Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
[/SUB]
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.
