Stocks rallied yesterday but it was a bit of a deceptive day. The Financials got a big boost from Goldman Sachs and Bank of America giving the XLF a 2% gain, and those financial stocks in the S&P 500 accounted for basically all of the gains. The Dow gained 142-points, or +0.59%, but it was Goldman Sachs' 9.5% gain that accounted for most of that. Otherwise, the S&P 500 was up 0.22% and the Nasdaq +0.15%. Small caps led on the upside and moved above some key resistance.
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It wasn't a bad day, that's for sure, but it wasn't quite a solid of a day as the indexes might indicate. There were more stocks down than up on both the NYSE and the Nasdaq indexes.
We're at a point where the market could find it tougher to advance, but it seems it is going to take it's time and grind higher as long as it wants to. Brexit issues, the ongoing trade war, higher interest rates, the slowdown in the economy, a government shutdown - nothing seems to matter right now. But at some point it probably will.
Per www.tsp.gov: "Some financial markets will be closed on Monday, January 21 in observance of the Martin Luther King, Jr. holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 21) will be processed Tuesday night (January 22), at Tuesday's closing share prices."
The S&P 500 / C-fund pushed above the 50-day EMA yesterday, but it couldn't hold into the close, although it does remain within that rising channel. If the 50-day EMA is going to hold, there isn't much this chart can do but break down below the channel. A move above the 50-day EMA would be a psychological boost for the bulls and could bring in more buyers, but the index is already stretched and overbought.
The DWCPF (small caps / S-fund) did poke its head above some key resistance and remains in a rising channel, but it's up 14% off the highs and probably due for a break.
The Transportation Index was up nicely early in the day but it slipped in late trading and created a negative reversal candlestick formation. Then, after the bell yesterday, CSX Transportation announced a disappointing earnings report and that could weigh on the Transports today, which is already lagging the rest of the market. Being a market leader, the bulls would prefer to follow this one up rather than seeing it lag.
The Financials led the market yesterday and without them we probably would have seen losses in the S&P 500 and Nasdaq. This move higher, breaking solidly above the 50-day EMA, is impressive. The gap from back in early December was filled right away, but there's a chance that the top of that gap could be the upside target for this rally.
The EFA (EAFE Index / I-fund) has been holding up rather well, like U.S. stocks, but it has been able to close above its 50-day EMA for 5 of the last 6 trading days, so that's a plus. There's still stiff resistance near 61.80, but if that bullish looking flag could breakout, perhaps it will head toward the 200-day EMA? Too early to say.
The VIX hit the 200-day EMA and bounced yesterday, again while stocks were also rallying, which is a negative divergence and a possible short-term warning sign.
The AGG (Bonds / F-fund) was up slightly and remains in that flag, or wedge-like formation. It could be a bear flag but a falling wedge is actually a bullish formation. The rising support line was broken earlier this month so I'd give the nod to the bears in bonds right now.
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.
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It wasn't a bad day, that's for sure, but it wasn't quite a solid of a day as the indexes might indicate. There were more stocks down than up on both the NYSE and the Nasdaq indexes.
We're at a point where the market could find it tougher to advance, but it seems it is going to take it's time and grind higher as long as it wants to. Brexit issues, the ongoing trade war, higher interest rates, the slowdown in the economy, a government shutdown - nothing seems to matter right now. But at some point it probably will.
Per www.tsp.gov: "Some financial markets will be closed on Monday, January 21 in observance of the Martin Luther King, Jr. holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 21) will be processed Tuesday night (January 22), at Tuesday's closing share prices."
The S&P 500 / C-fund pushed above the 50-day EMA yesterday, but it couldn't hold into the close, although it does remain within that rising channel. If the 50-day EMA is going to hold, there isn't much this chart can do but break down below the channel. A move above the 50-day EMA would be a psychological boost for the bulls and could bring in more buyers, but the index is already stretched and overbought.
The DWCPF (small caps / S-fund) did poke its head above some key resistance and remains in a rising channel, but it's up 14% off the highs and probably due for a break.
The Transportation Index was up nicely early in the day but it slipped in late trading and created a negative reversal candlestick formation. Then, after the bell yesterday, CSX Transportation announced a disappointing earnings report and that could weigh on the Transports today, which is already lagging the rest of the market. Being a market leader, the bulls would prefer to follow this one up rather than seeing it lag.
The Financials led the market yesterday and without them we probably would have seen losses in the S&P 500 and Nasdaq. This move higher, breaking solidly above the 50-day EMA, is impressive. The gap from back in early December was filled right away, but there's a chance that the top of that gap could be the upside target for this rally.
The EFA (EAFE Index / I-fund) has been holding up rather well, like U.S. stocks, but it has been able to close above its 50-day EMA for 5 of the last 6 trading days, so that's a plus. There's still stiff resistance near 61.80, but if that bullish looking flag could breakout, perhaps it will head toward the 200-day EMA? Too early to say.
The VIX hit the 200-day EMA and bounced yesterday, again while stocks were also rallying, which is a negative divergence and a possible short-term warning sign.
The AGG (Bonds / F-fund) was up slightly and remains in that flag, or wedge-like formation. It could be a bear flag but a falling wedge is actually a bullish formation. The rising support line was broken earlier this month so I'd give the nod to the bears in bonds right now.
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.
