Oh, those emotional Monday mornings. Stocks opened sharply higher yesterday but quickly fell apart and emotions were flying. After the initial sell-off, the indices stabilized in afternoon trading and we actually saw some positive numbers until the last few minutes of trading. The Dow lost 28-pointson the day.
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Small caps lagged and the Nasdaq has been hit hard lately, but as you will see below, where it closed may be the key. The I-fund held up because the dollar fell back yesterday.
The SPY (S&P 500 / C-Fund) continues to ride within a rising wedge, which is a big problem, but the action yesterday left us with as many questions as answers. The index closed above the 20-day EMA and that is a positive, but the rising wedge did break during early trading.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Russell 2000 fell all the way down to the 50-day EMA and that clearly seemed to get buyers interested. This would be a great place for the index to bottom and a bad place to be a seller if it does, so let's see if that will be the case.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq has been pounded over the last couple of days, which is never a good thing, but it managed to make its way back above the 50-day EMA by the close and it is possibly finding support at the bottom of a flag-like pattern.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transports don't look too bad compared to the rest of the major indices, and since it is the leader, is a possible bullish sign.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds ran back up to the top of their trading range, and we continue to wait for a break in one direction of the other.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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