As the Sunday night futures suggested, stocks opened sharply higher on Monday morning, and closed with solid gains, but the big gaps opened to start the day started to close slowly immediately after the opening bell. The Dow (+117-points), Russell 2000 (smalls caps), and the Transportation Index actually all closed their open gap by day's end, while the S&P 500 and Nasdaq still have some of their gaps open on the charts. There was a little buying in the final hour of trading and that kept the day from being a full negative reversal day.
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The Trade negotiations that led to an agreement not to add new tariffs, but did nothing for the old tariffs put in place earlier this year, was enough of a sigh of relief from investors after the highly anticipated G-20 meetings. We saw new highs in some indices so it was a bit of a disappointment for the bulls to see the buying dry up near the open.
It will be a 4-day week of trading this week because of the holiday, and that means volume may start to lighten up, and that tends to give the bulls the advantage, but the weak post-open action yesterday could trigger some profit taking on any positive action over the next couple days.
The June Jobs Report will come out early on Friday morning and estimates are looking for a gain of 160,000 jobs, an unemployment rate of 3.6%, and wage growth of 0.3%.
From www.tsp.gov: "Some financial markets will be closed on Thursday, July 4 in observance of the Independence Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Thursday night (July 4) will be processed Friday night (July 5), at Friday's closing share prices."
The S&P 500 (C-fund) gapped up 30-points, faded for most of the day, but bounced back some in the final hour of trading and closed the day up 23-points. There is an open gap on the chart below the breakout line, and that will be the key - can it hold above the old resistance which, once broken, can act as support?
The Dow did not quite make a new high yesterday and actually it is in the area that has been a struggle for the big 30 stocks that are in the index. We've seen a couple of failed breakouts and a failure right at resistance in April and early May. Here it is again. Yes, interest rates may be going down a month from now, and that could be the reason why this breakout may be different, but rates are being lowered because inflation has cooled, as has economic growth, and is that the environment that leads to sustained all-time highs in stocks?
The DWCPF (S-fund) also gapped up, and while the Russell 2000 index filled its gap, there is still a very small open gap on this chart near 1420.
The one-year chart of the small caps shows that, despite nearing the 2019 highs, it is still well below the August 2018 highs. It's not a bad looking chart but it is still lagging. The interest rate hikes late last year were poison to small companies, and with the prospects of multiple rate cuts coming, they are starting to perk up again.
The Dow Transportation Index was up sharply at the open but faded like the others, filled the open gap it created at the opening bell, and ended with a lack luster possible negative reversal pattern despite the 0.42% gain.
The dollar rallied strongly on the day and that should weigh some on the I-fund. After falling below the long-term support line and then creating a small bear flag, the dollar overachieved and blasted back above support and the 50-day EMA. That was a surprise.
AGG (Bonds / F-fund) was up again and actually closed at a new high so the rally refuses to die in bonds, no matter how stretched they get.
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 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.
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The Trade negotiations that led to an agreement not to add new tariffs, but did nothing for the old tariffs put in place earlier this year, was enough of a sigh of relief from investors after the highly anticipated G-20 meetings. We saw new highs in some indices so it was a bit of a disappointment for the bulls to see the buying dry up near the open.
It will be a 4-day week of trading this week because of the holiday, and that means volume may start to lighten up, and that tends to give the bulls the advantage, but the weak post-open action yesterday could trigger some profit taking on any positive action over the next couple days.
The June Jobs Report will come out early on Friday morning and estimates are looking for a gain of 160,000 jobs, an unemployment rate of 3.6%, and wage growth of 0.3%.
From www.tsp.gov: "Some financial markets will be closed on Thursday, July 4 in observance of the Independence Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Thursday night (July 4) will be processed Friday night (July 5), at Friday's closing share prices."
The S&P 500 (C-fund) gapped up 30-points, faded for most of the day, but bounced back some in the final hour of trading and closed the day up 23-points. There is an open gap on the chart below the breakout line, and that will be the key - can it hold above the old resistance which, once broken, can act as support?
The Dow did not quite make a new high yesterday and actually it is in the area that has been a struggle for the big 30 stocks that are in the index. We've seen a couple of failed breakouts and a failure right at resistance in April and early May. Here it is again. Yes, interest rates may be going down a month from now, and that could be the reason why this breakout may be different, but rates are being lowered because inflation has cooled, as has economic growth, and is that the environment that leads to sustained all-time highs in stocks?
The DWCPF (S-fund) also gapped up, and while the Russell 2000 index filled its gap, there is still a very small open gap on this chart near 1420.
The one-year chart of the small caps shows that, despite nearing the 2019 highs, it is still well below the August 2018 highs. It's not a bad looking chart but it is still lagging. The interest rate hikes late last year were poison to small companies, and with the prospects of multiple rate cuts coming, they are starting to perk up again.
The Dow Transportation Index was up sharply at the open but faded like the others, filled the open gap it created at the opening bell, and ended with a lack luster possible negative reversal pattern despite the 0.42% gain.
The dollar rallied strongly on the day and that should weigh some on the I-fund. After falling below the long-term support line and then creating a small bear flag, the dollar overachieved and blasted back above support and the 50-day EMA. That was a surprise.
AGG (Bonds / F-fund) was up again and actually closed at a new high so the rally refuses to die in bonds, no matter how stretched they get.
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 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.
