Stocks took a big hit to start the day on Wednesday, but as has been the case over the last several months, the bulls never seem to let a dip go to waste. The Dow battled back from being down about 130-points, to close up 39-points. Same for the S&P 500, and even though the Nasdaq and small caps lagged and closed with losses, they both rebounded off of their worst levels to create a positive reversal day on the charts.
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Those kind of reversals tend to continue into the following day, and after Apple reported strong earnings after the bell yesterday, it looks like we will see some upside to start the day on Wednesday.
Just to throw a wet towel on the excitement, which seems to be what I do lately... in vein - when Apple gave us an earnings warning in early January, stocks sold off sharply but that was the end of the downside. Now that they are impressing us with earnings -- and the QQQ jumped to over 190 in after hours trading -- could that be the exclamation point on the rally? I've used the term capitulation too often lately to have much meaning anymore, but perhaps an Apple driven rally could be just that?
There was some trade concerns yesterday when the White House Said It's Ready to Walk If No China Trade Deal Soon. That triggered the morning sell-off, but the market obviously didn't seem to care for too long as those losses were regained by the close.
The start of May is historically strong, but after that first week there's a lot of red on the seasonality chart, and as we mentioned before, the weaker 6-month period of the year for stocks starts in May, hence the saying, "sell in May and go away."
Chart provided courtesy of www.sentimentrader.com
The April jobs report comes out on Friday and estimates are looking for a gain of 200,000 jobs, an unemployment rate of 3.8%, and wage gains of 0.3%.
The S&P 500 (C-fund) was up just slightly and didn't make a new high but the positive reversal was just as impressive. The trouble technically is that rising wedge, but with the momentum behind stocks right now, I'm guessing that not many believe it will do what rising wedges tend to do, which is break down.
The DWCPF (S-fund) lagged yesterday but also created a large kangaroo tail positive reversal pattern which bodes well for early Wednesday, and Apple's earnings make it look all that more probable, but will it be enough to break it above the top of that wedge formation?
The EFA (I-fund) was up on the day and the weakness in the dollar played a big role in that.
The dollar tanked yesterday and that pushed up the I-fund, but also a lot of commodity prices - some of which were getting a little wobbly like oil, gold, and copper. There is some support in the dollar at yesterday's lows.
The Dow Transportation Index has been lagging badly of late but it too came to life yesterday when stocks turned around off that trade rumor low. 10,700 is still a decent support level, then the 50-day EMA, if the Transports do continue lower.
The AGG (Bonds / F-fund) was up slightly on the day but after it filled that small overhead open gap (blue) it started to fade a bit. There is still decent support near 108.50, and filling that gap (red) may be the best thing for it to do. Rallying and leaving a gap open always has investors looking over their shoulders.
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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[TD="align: center"] Daily TSP Funds Return
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[TD]
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[TD="align: center"]
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Those kind of reversals tend to continue into the following day, and after Apple reported strong earnings after the bell yesterday, it looks like we will see some upside to start the day on Wednesday.
Just to throw a wet towel on the excitement, which seems to be what I do lately... in vein - when Apple gave us an earnings warning in early January, stocks sold off sharply but that was the end of the downside. Now that they are impressing us with earnings -- and the QQQ jumped to over 190 in after hours trading -- could that be the exclamation point on the rally? I've used the term capitulation too often lately to have much meaning anymore, but perhaps an Apple driven rally could be just that?
There was some trade concerns yesterday when the White House Said It's Ready to Walk If No China Trade Deal Soon. That triggered the morning sell-off, but the market obviously didn't seem to care for too long as those losses were regained by the close.
The start of May is historically strong, but after that first week there's a lot of red on the seasonality chart, and as we mentioned before, the weaker 6-month period of the year for stocks starts in May, hence the saying, "sell in May and go away."
Chart provided courtesy of www.sentimentrader.com
The April jobs report comes out on Friday and estimates are looking for a gain of 200,000 jobs, an unemployment rate of 3.8%, and wage gains of 0.3%.
The S&P 500 (C-fund) was up just slightly and didn't make a new high but the positive reversal was just as impressive. The trouble technically is that rising wedge, but with the momentum behind stocks right now, I'm guessing that not many believe it will do what rising wedges tend to do, which is break down.
The DWCPF (S-fund) lagged yesterday but also created a large kangaroo tail positive reversal pattern which bodes well for early Wednesday, and Apple's earnings make it look all that more probable, but will it be enough to break it above the top of that wedge formation?
The EFA (I-fund) was up on the day and the weakness in the dollar played a big role in that.
The dollar tanked yesterday and that pushed up the I-fund, but also a lot of commodity prices - some of which were getting a little wobbly like oil, gold, and copper. There is some support in the dollar at yesterday's lows.
The Dow Transportation Index has been lagging badly of late but it too came to life yesterday when stocks turned around off that trade rumor low. 10,700 is still a decent support level, then the 50-day EMA, if the Transports do continue lower.
The AGG (Bonds / F-fund) was up slightly on the day but after it filled that small overhead open gap (blue) it started to fade a bit. There is still decent support near 108.50, and filling that gap (red) may be the best thing for it to do. Rallying and leaving a gap open always has investors looking over their shoulders.
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.
