Stocks rallied sharply yesterday after the minutes from the Fed's latest policy meeting showed that they plan to keep interest rates low longer than many investors had expected. The Dow gained 181-points on the day and there were 1% or more gains on most major indices.
[TABLE="width: 79%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Before the minutes were released, the market was having a petty good day, but the Fed gave the bulls something they have been apparently waiting for. I thought the jobs report on Friday was hinting that it would keep the Fed in an accommodating mood, but that's not how the market and investors saw it. I guess they had to be reassured.
The SPY (S&P 500 / C-fund) sliced back above the 20-day EMA and here it is again above all of the major moving averages and the key support from the neckline of the inverted head and shoulders that we have been watching. This recent 2-day rally does not look like a flag, but rather another "V" bottom, but until we see new highs, it could be a trap.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq 100, which has been hit very hard, had a big day gaining 1.7% yesterday. You can see that it is still below the 20 and 50-day EMA's, and that's the imminent test for this index. It's in a short-term down trend so resistance may be a little difficult to penetrate.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index gained 1.6% and it looks like the 50-day EMA and Tuesday's reversal day are producing the same result we saw in March. It looks like a "W" type bottom, but we need to see a move above 136 hold, where the prior breakout failed.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here is a chart of the historical performance surrounding Good Friday, which is next Friday, April 18. Tomorrow (the Friday before Good Friday) looks like a bad day, but next week stocks tend to get perky.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bonds remain in their trading range. Wash, rinse, repeat.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey Results and its 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
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.
