Stocks pulled back yesterday with different degrees of severity. The Dow and and S&P 500 saw modest losses while the Nasdaq and small caps were hit much harder. A few of the FOMC committee members have indicated that they disagree with Janet Yellen's dovish guidance on interest rates, and that sent the dollar higher and put pressure on stocks and commodities.
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The price of oil was one of the victims of the strength in the dollar and, as we discussed yesterday, a decline in oil today would have it break below the rising support line off the lows. Potentially a problem.
This will be a short week as this Friday is Good Friday and a market holiday and the TSP will be closed. There will be no reports and the TSP will not process transactions.
I have show this chart enough times but you knew it would be coming out again if we started to fail at the test of the middle of the head area.
And here we are...
The DWCPF (Dow Completion Index / Small Caps) was down rather sharply at -1.68%. It has come a long way since the February lows but unlike the S&P, it has failed to reach 200-day EMA. At this point we can probably safely say that whichever breaks first - above the 200 EMA or below the 50 EMA - will win the longer-term direction war.
The Dow Transportation Index has broken above the 200-day EMA and may be the canary in the coal mine for a new bull market since it was just that for the bear market this time last year. The 200-day EMA should try to hold as support, and as you can see the rising support line will intersect it near 7800, so that will be a key pivot point for this market leader.
The price of oil broke below the support line of that sharply rising trading channel after failing at the 200-day EMA last week. With stocks closely following the action, I don't have to tell how significant this chart may be in the coming days.
The AGG (Bonds / F-fund) rallied modestly holding at the pennant's support line after filling that small open gap on Tuesday.
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. The market and TSP are closed on Friday so we will see you back here on Monday. Have a great Easter weekend!
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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The price of oil was one of the victims of the strength in the dollar and, as we discussed yesterday, a decline in oil today would have it break below the rising support line off the lows. Potentially a problem.
This will be a short week as this Friday is Good Friday and a market holiday and the TSP will be closed. There will be no reports and the TSP will not process transactions.
The S&P 500 / C-Fund shows a possible rising wedge peak being tested now. A move higher from here would all but negate the wedge but having come so far, so quickly, I think minimally a test of the 200-day EMA would be a healthy move, with a move to the 50-day EMA still being within reason, but anything more than that could be considered a bear market rally failure, despite how strong it has been. But that is something we may not know for days or weeks.
I have show this chart enough times but you knew it would be coming out again if we started to fail at the test of the middle of the head area.
And here we are...
The DWCPF (Dow Completion Index / Small Caps) was down rather sharply at -1.68%. It has come a long way since the February lows but unlike the S&P, it has failed to reach 200-day EMA. At this point we can probably safely say that whichever breaks first - above the 200 EMA or below the 50 EMA - will win the longer-term direction war.
The Dow Transportation Index has broken above the 200-day EMA and may be the canary in the coal mine for a new bull market since it was just that for the bear market this time last year. The 200-day EMA should try to hold as support, and as you can see the rising support line will intersect it near 7800, so that will be a key pivot point for this market leader.
The price of oil broke below the support line of that sharply rising trading channel after failing at the 200-day EMA last week. With stocks closely following the action, I don't have to tell how significant this chart may be in the coming days.
The AGG (Bonds / F-fund) rallied modestly holding at the pennant's support line after filling that small open gap on Tuesday.
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. The market and TSP are closed on Friday so we will see you back here on Monday. Have a great Easter weekend!
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.
