Stocks were up about 99% of the day yesterday but a late sell-off sent the Dow to a 12-point loss. Nothing disastrous, but those reversals tend to lead to at least a little more short-term downside. Stocks had come a long way in the last week and a half, so a 12-point pullback isn't anything to worry about yet. We see some double tops that usually means a little pause.
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The dollar was down again yesterday, and the selling in the U.S. markets came late so the I-fund had a nice day. Bonds were up slightly.
The Transportation Index got clobbered yesterday as the railroad stocks were hit hard and the breakout I was looking for was put on hold.
The SPY (S&P 500 / C-fund) is making a bull flag but the double top could get in the way temporarily. This is a bullish chart, but some downside could occur in the short-term while the double top resistance gets played.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq 100 also found resistance at a double top looking formation and an open gap was tugging on it and nearly filled it. So far all textbook technical analysis.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) ran above the rising resistance line and often resistance, once broken, can act as support. I don't know if that will be the case this time because there's always a chance that the large rising trading channel will suck it back in.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) had a nice day and it had help from another down day in the dollar. Support is holding and channels are still intact so this looks fine for now.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index was the problem on Monday as railroad stocks got hammered and the Index could not hold up. In yesterday's commentary I was looking for a breakout above 9200, but the market humbled me and my call as the index took another dive down near the 50-day EMA. There is another 100-points below before support hits it, but I suspect the Transports won't take long to bounce back.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was flat but the bull flag and rising trading channel show a positive bias here.
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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