Stocks did a post-holiday pullback on Tuesday, so it was the holiday reversal at work as the Dow shed 109-points on the day. Oil fell sharply on concerns of a global slowdown as the dollar rallied, while bank stocks and yields continue to decline.
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Despite the dollar rallying, gold and silver continue to rally as investors turn to the safety play.
The June Jobs Report comes out on Friday and the estimates are looking for a gain of 170,000 jobs and an unemployment rate of 4.8%. The Jobs Report Contest is now open in the forum. Click here for more info.
Last month's jobs report saw a big disappointment with only 38,000 jobs added. Was that a fluke that will correct itself this month, or is the jobs market weakening with the economy?
Earnings season will be upon us in about a week and earnings expectation have been lowered. Is this setting up as a sell the rumor, buy the news?
The first half of July is seasonally strong and we don't tend to see weakness until the second half of the month, and during an election year the month performs even better. If you weren't confused before, maybe you should be.
The SPY (S&P 500 / C-Fund) backed off after Friday's minor negative reversal, but the index closed off the lows possibly creating a small positive reversal day. It remains above the 20, 50, and 200-day EMA's and, if we ignore the loud noise of the Brexit sell-off and recovery for a minute, it remains above a major rising support line.
The DWCPF (S-fund) was a little more volatile in its side on Tuesday but it managed to close back above the 50-day EMA after a brief dip below it. There's a large open gap near 992 and filling that could be setting it up for a test of the bottom of what looks like a possible large bull flag.
The Dow Transportation Index was down modestly and it has been lagging but looking at the longer-term monthly chart, the question is, was the low in January a major low before the next higher high, or will the major peak in 2014 remain as a long tern top for the market leading Transports?
The EFA (I-fund) took the brunt of the sell-off yesterday as a strong dollar usually does to the I-fund. Another gap was opened between about 55.00 and 55.75.
The dollar was up big. There is a big bull flag formed which would normally break to the upside, but there is still a large open gap down near 24.20.
The price of oil was down with the help of the strong dollar. There seems to be a downtrend forming after the rising trend broke down last month, but the 50-day EMA is trying to hold as support again.
The AGG (Bonds / F-fund) was up again. The strength in bonds, and decline in yields is starting to smell like a bubble. Bubbles can grow much larger than we'd expect before they burst, but even in the short-term I wouldn't be surprised to see a pullback to test the old resistance line of that old trading channel. That will also fill some recently opened gaps. But with gold soaring, and yields dropping, perhaps there is something bigger at work here? And that probably wouldn't be good for stocks.
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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Despite the dollar rallying, gold and silver continue to rally as investors turn to the safety play.
The June Jobs Report comes out on Friday and the estimates are looking for a gain of 170,000 jobs and an unemployment rate of 4.8%. The Jobs Report Contest is now open in the forum. Click here for more info.
Last month's jobs report saw a big disappointment with only 38,000 jobs added. Was that a fluke that will correct itself this month, or is the jobs market weakening with the economy?
Earnings season will be upon us in about a week and earnings expectation have been lowered. Is this setting up as a sell the rumor, buy the news?
The first half of July is seasonally strong and we don't tend to see weakness until the second half of the month, and during an election year the month performs even better. If you weren't confused before, maybe you should be.
The SPY (S&P 500 / C-Fund) backed off after Friday's minor negative reversal, but the index closed off the lows possibly creating a small positive reversal day. It remains above the 20, 50, and 200-day EMA's and, if we ignore the loud noise of the Brexit sell-off and recovery for a minute, it remains above a major rising support line.
The DWCPF (S-fund) was a little more volatile in its side on Tuesday but it managed to close back above the 50-day EMA after a brief dip below it. There's a large open gap near 992 and filling that could be setting it up for a test of the bottom of what looks like a possible large bull flag.
The Dow Transportation Index was down modestly and it has been lagging but looking at the longer-term monthly chart, the question is, was the low in January a major low before the next higher high, or will the major peak in 2014 remain as a long tern top for the market leading Transports?
The EFA (I-fund) took the brunt of the sell-off yesterday as a strong dollar usually does to the I-fund. Another gap was opened between about 55.00 and 55.75.
The dollar was up big. There is a big bull flag formed which would normally break to the upside, but there is still a large open gap down near 24.20.
The price of oil was down with the help of the strong dollar. There seems to be a downtrend forming after the rising trend broke down last month, but the 50-day EMA is trying to hold as support again.
The AGG (Bonds / F-fund) was up again. The strength in bonds, and decline in yields is starting to smell like a bubble. Bubbles can grow much larger than we'd expect before they burst, but even in the short-term I wouldn't be surprised to see a pullback to test the old resistance line of that old trading channel. That will also fill some recently opened gaps. But with gold soaring, and yields dropping, perhaps there is something bigger at work here? And that probably wouldn't be good for stocks.
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.
