It was quite the volatile day for stocks on Thursday as the S&P 500 fluctuated between negative and positive more than ten times during the day, and it was actually positive with 15 minutes left in the day before that final push lower. Investors are on edge leading up to next week's tariff day and even this morning's PCE Prices inflation data. We saw Monday's gaps getting filled and for the most part they held, but not by much. The indices are in a pivot point area as they near the prior lows.
Here's the intraday S&P 500 chart from yesterday and they aren't making it easy on us. After the recent rally stalled, I have been looking at the open gaps and the prior lows as possible pullback targets. The open gap from last Friday's close was at 5668 and the low yesterday came very early and hit 5670 (close enough?) before the bulls jumped on it. But the bears did not give up as you can see. The rally stalled at 5732, also coming early, and the rest of the day was a big chop back and forth in between that range as the uncertainty keep investors from committing.
The daily S&P 500 (C-fund) chart shows the gap fill holding as the low yesterday but the index closed back below that blue 200-day EMA again. Many of my indicators are on the fence, just like this index. If I had to guess, we could see more selling into the April 2nd tariff kick off, and then a possible buy the news reaction. In the interim it may get quite volatile and as I talked about yesterday, it could shake off some of the weaker holding bulls before a rally. That said, I am not married to that analysis and if the charts tell me otherwise, I will "try" to listen.
We have certainly seen a shift in market sentiment, and you can see why as the leaders of the bull market have faded this year. Just look at the charts of Nvidia and Tesla - both unable to get back above their 200-day EMA and remain in downtrends after a series of lower highs and lower lows.
Strength has been in the safe haven of gold lately, and that's not what you want to see leading the market.
Everyone seems to be walking on eggshells right now. One of the indications of the market's appetite for risk is in the crypto-currencies and you can see that bitcoin has also come well off its highs from January, but there's also some rising support as it sits above its 200-day averages. The direction this breaks could be telling of investor's desire to buy bargains (or lower prices) or if they will step aside and see what happens with the tariffs first.
The PCE Prices and Personal Income reports come out before Friday's opening bell. The bear flag on the 10-year Treasury Yield chart is hinting at a cooling inflation number that would send yields lower, but that's just a guess based on technical analysis.
The DWCPF (S-fund) fell 1% on the day, filled its open gap and close above the bottom of the gap but it certainly looks vulnerable here at the bottom of that gap as it trades below that red 300 day moving average again. It's been below the 200-day EMA all month and now it has given back all of last Monday's gain.
The ACWX (I-fund) was actually up so either the relative strength is back here, or that late selling in US stocks didn't impact the overseas indices that trade overnight. It managed to hold and barely close above the bottom of the red ascending channel again. It also found support at the top of an open gap.
BND (F-fund) was basically flat but the bulls flag here, and the bear flag on the 10-year yield chart, are suggesting support will hold and we could see some upside here. If there is any downside the area where the 50-day average and the bottom of that flag meet could provide support.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
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The daily S&P 500 (C-fund) chart shows the gap fill holding as the low yesterday but the index closed back below that blue 200-day EMA again. Many of my indicators are on the fence, just like this index. If I had to guess, we could see more selling into the April 2nd tariff kick off, and then a possible buy the news reaction. In the interim it may get quite volatile and as I talked about yesterday, it could shake off some of the weaker holding bulls before a rally. That said, I am not married to that analysis and if the charts tell me otherwise, I will "try" to listen.
We have certainly seen a shift in market sentiment, and you can see why as the leaders of the bull market have faded this year. Just look at the charts of Nvidia and Tesla - both unable to get back above their 200-day EMA and remain in downtrends after a series of lower highs and lower lows.
Strength has been in the safe haven of gold lately, and that's not what you want to see leading the market.
Everyone seems to be walking on eggshells right now. One of the indications of the market's appetite for risk is in the crypto-currencies and you can see that bitcoin has also come well off its highs from January, but there's also some rising support as it sits above its 200-day averages. The direction this breaks could be telling of investor's desire to buy bargains (or lower prices) or if they will step aside and see what happens with the tariffs first.
The PCE Prices and Personal Income reports come out before Friday's opening bell. The bear flag on the 10-year Treasury Yield chart is hinting at a cooling inflation number that would send yields lower, but that's just a guess based on technical analysis.
The DWCPF (S-fund) fell 1% on the day, filled its open gap and close above the bottom of the gap but it certainly looks vulnerable here at the bottom of that gap as it trades below that red 300 day moving average again. It's been below the 200-day EMA all month and now it has given back all of last Monday's gain.
The ACWX (I-fund) was actually up so either the relative strength is back here, or that late selling in US stocks didn't impact the overseas indices that trade overnight. It managed to hold and barely close above the bottom of the red ascending channel again. It also found support at the top of an open gap.
BND (F-fund) was basically flat but the bulls flag here, and the bear flag on the 10-year yield chart, are suggesting support will hold and we could see some upside here. If there is any downside the area where the 50-day average and the bottom of that flag meet could provide support.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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 may use additional methods and strategies to determine fund positions.
