Stocks opened mostly lower on Tuesday but once again the dip buyers came in, despite oil falling below the pivotal $50 level. Some calming words from Janet Yellen set the market at ease as she put the idea of higher interest further down the road saying the Fed, “will at some point begin considering an increase in the target range for the federal funds rate.”
The Dow gained 92-points and the broader indices saw more modest gains, and in the case of the small caps, just slight gains.
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The I-fund continues to lead but it seems everyone wants a piece of it now so it's probably due for a rest. The F-fund had a big day after Yellen's remarks sent yields down and bond prices higher.
The SPY (S&P 500 / C-fund) popped again and as I mentioned in Tuesday's Commentary, this could be the "push higher" I said we could see by the end of the week so that the November "rhyme" continues.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) was basically flat, but like most stock indices, a pause here is nothing shocking considering the gains they have seen since the February 2nd low. It remains above the old resistance line.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index has put together three strong days after the strange negative reversal day it posted on Thursday of last week. It has made a higher closing high (above the prior peak) for the first time in a while, but there are still several layers of resistance that could still get in the way.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Oil fell below the $50 mark, a level I thought could spook stocks if it did not hold. Possibly fortunate for the stock market, Janet Yellen came to the rescue so stocks stocks were able to rally despite the 4 handle ($49) in oil.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) has been relentless with few hiccups since the breakout above the 200-day EMA nearly two weeks ago. How long can it last? Usually longer than we think, but whatever happens, I'm sure it will frustrate the most investors / traders as possible along the way.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) had a big day after Janet Yellen said interest rates hikes may be further down the road then many originally thought. Bond yields dropped as bond prices and the F-fund shot up on the news.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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