Stocks rallied again on Tuesday with the Dow adding another 89-points. Small caps led the way yesterday and bonds also posted a gain. Today, Janet Yellen takes the stage so the market will get a better idea of her thoughts on the economy, and monetary policy - possibly a market mover.
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After lagging on Monday, seeing the small caps catch a bid leans on the bullish side for stocks. The dollar ended flat and the recent weakness has not been as friendly to the I-fund as we have come to expect.
The support from the inverted head and shoulder's neckline on the SPY (S&P 500 / C-Fund) has so far played out like a technical analysis text book. The 20-day EMA also held, and that's what we would expect in a bull market - so why doesn't it feel like one? You can't throw a rock at the CBNC set without hitting someone who is looking for the market to top. That may be a bullish.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps had a big day yesterday and the Russell 2000 is now flirting with new highs again. Obviously a bullish sign as a strong bull market is generally led by small caps.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index has also had a good run this week and nearly made a new high yesterday before slipping toward the end of the day. It remains above the January high, but not by much. I would think that a fall below that level a second time would not be a good sign.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds were higher yesterday, but these charts are still in their trading ranges and yesterday's action did little to change the technical picture.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The FOMC meeting concludes today and the policy statement is normally released some time after 2 PM ET. It could be a market mover as we find out what's in Janet Yellen's mind.
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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