Stocks rallied on Friday and repaired most of the losses from earlier in the week but the three TSP stock funds did end up with slight to modest losses for the week for the first time in over a month. The Dow gained 109-points after stocks survived a sharp early sell-off.
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Yup, it was another trade comment, this one positive, from Presidents Trump and Xi that helped lift stocks on Friday, but it was concerns about a delay in the phase 1 rollout of the trade deal that pushed stocks lower to start the week. These trade tidbits are getting a bit ridiculous but it is what it is, and it probably won't stop any time soon.
We're heading into a holiday week and there is an historic positive seasonal bias on Wednesday and Friday of this week. We also head into December next week, the best month of the year as far as percentage of times being positive - about 75% of the time.
Chart provided courtesy of www.sentimentrader.com
But as we saw last year, there's no guarantees. Last year the S&P 500 was down 9% in December.
Trading volume should be lighter than normal, barring any major events. While it could be a quiet week, light volume also means headlines can push around the market indices more easily so volatility could be a factor.
The market is in a vulnerable position with many internal warnings signs flashing despite the new highs, but also many positives including a breakout from a long multi-year consolidating period just when the strong seasonal period get started, so the final weeks of 2019 could certainly be interesting.
The futures opened higher on Sunday evening.
The S&P 500 (C-fund) was up on Friday, repeating the action from the prior two days where the dip buyers showed up to take the index off its lows - keeping it within that narrow rising trading channel. However the action may be creating a small bear flag. The gap near 3100 was filled last week, and you can see several small gaps being filled (blue boxes) but there are a couple of open gaps (red) that remain potential pullback targets.
The weekly chart shows the breakout in October from the long-term consolidation, and here it is three weeks later and still holding. However, there is some resistance at the top of that blue rising trading channel and perhaps that is telling us that we need to see a pause before a year end Santa Claus rally.
The S-fund showed some cracks when it closed below its rising channel last week, after Thursday's sharp sell-off. There is also a double top in play here near 1460. Again, this could be a good time for a pause.
The Dow Transportation Index has successfully tested its 50-day EMA so far after the recent 500+ point double top pullback that took it below its rising support line.
The High Yield Corporate Bond Fund came back to life on Friday, possibly being part of the catalyst for the rally in stocks. This seems to be a pattern - breaking below the 50-day EMA, but coming right back quickly in the following days.
The Volatility Index has been hovering above 12 for a few weeks now, which has been a stubborn support area this year. Everyone of those tests resulted in another eventual rally in the VIX and a simultaneous pullback in stocks.
The AGG (bonds F-fund) was up slightly on Friday as the top of that red bull flag has been able to hold as support. That needs to hold or else there will be a lot more room on the downside for this to fall. On the upside, there some resistance near 113.10, and then just above 113.25.
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 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][/TD]
[TD="align: center"]
[/TR]
[/TABLE]
Yup, it was another trade comment, this one positive, from Presidents Trump and Xi that helped lift stocks on Friday, but it was concerns about a delay in the phase 1 rollout of the trade deal that pushed stocks lower to start the week. These trade tidbits are getting a bit ridiculous but it is what it is, and it probably won't stop any time soon.
We're heading into a holiday week and there is an historic positive seasonal bias on Wednesday and Friday of this week. We also head into December next week, the best month of the year as far as percentage of times being positive - about 75% of the time.
Chart provided courtesy of www.sentimentrader.com
But as we saw last year, there's no guarantees. Last year the S&P 500 was down 9% in December.
Trading volume should be lighter than normal, barring any major events. While it could be a quiet week, light volume also means headlines can push around the market indices more easily so volatility could be a factor.
The market is in a vulnerable position with many internal warnings signs flashing despite the new highs, but also many positives including a breakout from a long multi-year consolidating period just when the strong seasonal period get started, so the final weeks of 2019 could certainly be interesting.
The futures opened higher on Sunday evening.
The S&P 500 (C-fund) was up on Friday, repeating the action from the prior two days where the dip buyers showed up to take the index off its lows - keeping it within that narrow rising trading channel. However the action may be creating a small bear flag. The gap near 3100 was filled last week, and you can see several small gaps being filled (blue boxes) but there are a couple of open gaps (red) that remain potential pullback targets.
The weekly chart shows the breakout in October from the long-term consolidation, and here it is three weeks later and still holding. However, there is some resistance at the top of that blue rising trading channel and perhaps that is telling us that we need to see a pause before a year end Santa Claus rally.
The S-fund showed some cracks when it closed below its rising channel last week, after Thursday's sharp sell-off. There is also a double top in play here near 1460. Again, this could be a good time for a pause.
The Dow Transportation Index has successfully tested its 50-day EMA so far after the recent 500+ point double top pullback that took it below its rising support line.
The High Yield Corporate Bond Fund came back to life on Friday, possibly being part of the catalyst for the rally in stocks. This seems to be a pattern - breaking below the 50-day EMA, but coming right back quickly in the following days.
The Volatility Index has been hovering above 12 for a few weeks now, which has been a stubborn support area this year. Everyone of those tests resulted in another eventual rally in the VIX and a simultaneous pullback in stocks.
The AGG (bonds F-fund) was up slightly on Friday as the top of that red bull flag has been able to hold as support. That needs to hold or else there will be a lot more room on the downside for this to fall. On the upside, there some resistance near 113.10, and then just above 113.25.
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 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.
