Stocks opened higher on Monday morning as the bulls wasted no time tacking onto last week's gains. The momentum slowed down fairly quickly however, and we saw the daily highs reached shortly after the open. The Dow gained a solid 63-points while the S&P 500 and Nasdaq closed slightly higher on the day after giving back some gains in afternoon trading.
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As you will see in the charts below, there is a possible momentum stopper formation on the S&P 500 and small cap index, but it has not always been wise this year to underestimate the bulls' ability to keep pushing the indices higher.
Another major hurricane, Maria, is posing a threat to the Caribbean and heading toward Puerto Rico, and of course who knows where it goes from there. The market has shrugged these storms off so far but let's hope this one turns back out to sea and spares us damage and loss.
There is a 2-day Federal Reserve meeting this week starting today with a policy statement announcement on Wednesday afternoon. It could be a market mover depending on how they spin it or give clues for their next move, but no one is expecting a rate hike at this time. As we've said before, they've gotten cold feet because their original plan was to hike in September.
The SPY (S&P 500 / C-fund) broke to the upside of the "F" flag, the formation that I had recently said usually breaks to the downside. But the early gains faded a bit as the day wore on and the SPY hit some overhead resistance and we were left with a spinning top candlestick formation. These spinning tops are a sign of indecision from investors and have a tendency to form a reversal of sorts, even if just a short-term pullback. But as I said above, betting against this market has not been kind to the bears so we'll see if the bulls will ignore this.
The longer term weekly chart shows us that the S&P 500 fell below the 50-week moving average every year since the bear market of 2007... except in 2013. But even 2013 we saw what we almost always see this time of year, which is a meaningful pullback that either starts or ends in September / October.
The DWCPF (small caps / S-fund) rallied strongly and led the way on Monday but in the process it is hitting the July high which could set up a double top. At this point even the bulls might welcome a slowdown from this hot index to clean up some of the technical gaps before it readies itself for a breakout.
The Dow Transportation Index was down on the day and continues to move sideways at the 9500 - 9550 area.
The EAFE Index (I-fund) was flat on the day with the dollar rally about 0.25% on the day. It still sits atop of the old resistance line which is trying to hold as support now.
The AGG (Bonds / F-fund) moved down on Monday as the old support continues to hold as resistance.
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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Another major hurricane, Maria, is posing a threat to the Caribbean and heading toward Puerto Rico, and of course who knows where it goes from there. The market has shrugged these storms off so far but let's hope this one turns back out to sea and spares us damage and loss.
There is a 2-day Federal Reserve meeting this week starting today with a policy statement announcement on Wednesday afternoon. It could be a market mover depending on how they spin it or give clues for their next move, but no one is expecting a rate hike at this time. As we've said before, they've gotten cold feet because their original plan was to hike in September.
The SPY (S&P 500 / C-fund) broke to the upside of the "F" flag, the formation that I had recently said usually breaks to the downside. But the early gains faded a bit as the day wore on and the SPY hit some overhead resistance and we were left with a spinning top candlestick formation. These spinning tops are a sign of indecision from investors and have a tendency to form a reversal of sorts, even if just a short-term pullback. But as I said above, betting against this market has not been kind to the bears so we'll see if the bulls will ignore this.
The longer term weekly chart shows us that the S&P 500 fell below the 50-week moving average every year since the bear market of 2007... except in 2013. But even 2013 we saw what we almost always see this time of year, which is a meaningful pullback that either starts or ends in September / October.
The DWCPF (small caps / S-fund) rallied strongly and led the way on Monday but in the process it is hitting the July high which could set up a double top. At this point even the bulls might welcome a slowdown from this hot index to clean up some of the technical gaps before it readies itself for a breakout.
The Dow Transportation Index was down on the day and continues to move sideways at the 9500 - 9550 area.
The EAFE Index (I-fund) was flat on the day with the dollar rally about 0.25% on the day. It still sits atop of the old resistance line which is trying to hold as support now.
The AGG (Bonds / F-fund) moved down on Monday as the old support continues to hold as resistance.
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.
