Stocks played Turnaround Tuesday yesterday as Monday's big gains were nearly completely reversed. The Dow gave up 189-points and many of the major indices lost 1% or more. The losses weren't overwhelming. We simply saw many of the gaps opened on Monday morning get filled. But the issue is where stocks are stalling - right at some major resistance levels, and if they don't bounce back quickly, the bear market rally could be over.
[TABLE="width: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]
[/TD]
[TD="width: 49, align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As we mentioned yesterday, the March Oil futures contracts expired on Monday with what looked like a short-covering rally right up to the 50-fay EMA. Yesterday the futures rolled into the April contract and the downside resumed.
The S&P 500 Index / C-Fund moved back below the 50-day EMA after just one close above it, and it was actually the 50-day SMA (Simple Moving Average) where the SPY stalled on Monday. The open gap was filled yesterday and the bulls are hoping that was the mission of yesterday's decline, and nothing more. But the overhead resistance may prove too much if the the bear market is planning to stick around a while longer.
The price of oil ran up to the 50-day EMA on Monday as well, and as we mentioned above it may have been a result of the contract rollover, and Tuesday's sell-off pushed prices down to the top of the old resistance line. There is a small open gap that may need to get filled, but the main question is whether it will creep back into the descending trading channel or hold above that old resistance.
The Dow Completion Index (small caps / S-Fund) found resistance at the bottom of the old bear flag on Monday and pulled back 1% on Tuesday nearly filling its open gap. Like the other charts it is at a very important juncture. Do these charts want to fill the gaps and resume upward, or are the bear market rallies over?
The EFA (EAFE Index / I-fund) was the biggest loser Tuesday as it filled the open gap and kept going. Like some of the other charts there is one or more open gaps further down and those may be the next targets if things don't turn back around quickly.
The London FTSE had broken above the descending trading channel but yesterday's losses pushed it back in, although it closed above the 50-day EMA again. Another important pivot point. This really is an interesting week for stocks all around the world.
The AGG (bonds / F-fund) closed slightly higher after another test of the 20-day EMA was successful. The trading channel remains intact.
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
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]
[TD="width: 49, align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As we mentioned yesterday, the March Oil futures contracts expired on Monday with what looked like a short-covering rally right up to the 50-fay EMA. Yesterday the futures rolled into the April contract and the downside resumed.
The S&P 500 Index / C-Fund moved back below the 50-day EMA after just one close above it, and it was actually the 50-day SMA (Simple Moving Average) where the SPY stalled on Monday. The open gap was filled yesterday and the bulls are hoping that was the mission of yesterday's decline, and nothing more. But the overhead resistance may prove too much if the the bear market is planning to stick around a while longer.
The price of oil ran up to the 50-day EMA on Monday as well, and as we mentioned above it may have been a result of the contract rollover, and Tuesday's sell-off pushed prices down to the top of the old resistance line. There is a small open gap that may need to get filled, but the main question is whether it will creep back into the descending trading channel or hold above that old resistance.
The Dow Completion Index (small caps / S-Fund) found resistance at the bottom of the old bear flag on Monday and pulled back 1% on Tuesday nearly filling its open gap. Like the other charts it is at a very important juncture. Do these charts want to fill the gaps and resume upward, or are the bear market rallies over?
The EFA (EAFE Index / I-fund) was the biggest loser Tuesday as it filled the open gap and kept going. Like some of the other charts there is one or more open gaps further down and those may be the next targets if things don't turn back around quickly.
The London FTSE had broken above the descending trading channel but yesterday's losses pushed it back in, although it closed above the 50-day EMA again. Another important pivot point. This really is an interesting week for stocks all around the world.
The AGG (bonds / F-fund) closed slightly higher after another test of the 20-day EMA was successful. The trading channel remains intact.
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
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
