Stocks were a little directionless at the start of the day on Monday, but the bulls took control taking the indices slowly higher throughout the day, but with about an hour left in the trading day, the bears stepped in and smacked it down leaving the indices with just small gains. Small caps were down again.
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The S-fund lagged again while bonds pulled back from resistance.
The SPY (S&P500 / C-fund) made a new intraday high on Monday, but the weak close took it back below the May high setting up a possible failed breakout. Well, it was a failed breakout, but if the rising trend continues I wouldn't call it a bearish failure yet. The gaps are there for the taking if the bears want them since things are feeling a little heavy, but it seems like every one is expecting a pullback and the market usually doesn't make it that easy.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (S-fund) fell back below the 50-day EMA after 4 closes above it, and the small caps / Russell 2000 just never made a move on Monday like the larger stocks. This dip could be a bull flag forming, but again the open gap may be too much to resist. We'll see.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index was getting close to breaking the bearish resistance line it has been in for months now, but that resistance was just too much for it at the moment. This could also be a bull flag, but when in a bear market, we should expect negative results until it proves us wrong.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE index / I-fund) ended with a small gain and continues to climb higher despite the recent strength in the dollar. The overhead resistance is descending and could be tested this week.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The next couple of days have a very negative seasonality record. Today is trading day #14. This is most likely due to earning season which, whether earnings are good or bad, tends to generate some profit taking. But it doesn't last too long as the end of July get better.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The AGG (bonds / F-fund) dipped from the strong resistance area that we have been watching.
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 www.tsptalk.com/comments.php
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