Stocks were mixed on Tuesday, gaps were filled, volume was light, and the indices closed well off their lows. The Dow gained 18-points and the Transports were up, but the S&P, the Nasdaq, small caps, and the I-fund closed modestly lower.
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You can see that the stock market still has its finger on the pulse of the oil market, which slid all of Tuesday morning, but rallied back in the afternoon. The price of oil was temporarily below $76 a barrel Tuesday morning.
The SPY (S&P 500 / C-fund) filled the open gap on Tuesday morning and hit the daily low at the short-term rising support line, and that was where the selling stopped and the rebound started. There was a possible positive reversal day, but the double top near 202 will be the test of any further upside.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) also closed off the lows but it still gave back some of Friday's gained.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Russell 2000 nearly filled its open gap and there is some solid support near 1160 that really needs to hold or there isn't much support until it gets to where the three major moving average are converging right now near 1126-1128. Should we get a pullback, that would be a healthy are to fall to, and to find support.
Chart provided courtesy of www.stockcharts.comm, analysis by TSP Talk
The death of the Russell 2000 was greatly exaggerated in October after the "Death Cross." Three days later the index bottomed and has rebounded 12% since. But now the faster moving averages are moving back above 200-day EMA which would be a "Golden Cross" and that is bullish, but also a possible sign of being short-term overbought. But will that trigger an overbought pullback?
The price of oil has been falling steadily for months. Yesterday may have produced a temporary pause of the downside as we saw a positive reversal day by the close. But the trend is certainly down and the bears will likely sell any rallies until the trend is broken.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) filled its open gap and remains below some key resistance after closing above it for just one day.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds/ (F-fund) remains in a downtrend but continues to hang above the August highs.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The October jobs report comes out on Friday and consensus estimates are looking for a gain of about 235,000 jobs and an unemployment rate of 5.9%. The jobs report contest has been started in the Forum.
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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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