Stocks opened lower on Monday, but by the close it was mostly a flat and mixed day for the indices as the Dow (+13-points) and the Nasdaq had small gains, while the S&P 500 and small caps had small losses. Volume was very light as everyone awaits this week's FOMC meeting, which is today and Wednesday.
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The I-fund and bonds (F-fund) posted small gains.
The SPY (S&P 500 / C-fund) had an inside day, which doesn't tell us too much more than we knew on Friday, but any sideways to slightly lower action could take the indices off their current extreme overbought conditions. The open gap (red box) is always something to consider as a target since they rarely go unfilled.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) is still hovering near the 50 and 200-day EMA's. There's no breakout yet but the sideways action also means no breakdown. It's a wait and see although the bulls still have the ball, but the bears have the resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Russell 2000 (small caps) is in the same situation. This would be typical spot during a bear market where the index would fail, but we're not in a bear market.
Chart provided courtesy of www.stockcharts.comm, analysis by TSP Talk
The EFA (EAFE Index / I-fund) stalled and we continue to see sluggish action in the European stock markets.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The London FTSE and a couple other major markets, posted a negative outside reversal day yesterday. That can be a negative turning point for the rebound.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
I can repeat, word for word, what I said on Monday about the AGG (Bonds / F-fund). It was up slightly but remains in a short-term downtrend since the peak on October 15. I believe the longer-term trend in bonds may have turned negative, but in the short-term there could be a relief rally. The 20-day EMA is being tested now.
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 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.
