Stocks were down sharply in early trading yesterday but they stabilized and spent the rest of the day flat to modestly lower. The Dow closed down 5-points and bonds closed higher.
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The SPY (S&P 500 / C-fund) moved lower on Thursday morning, and tested the old neckline of the inverted head and shoulders again - and held. The 50-day EMA is also just below the current levels giving the index a double dose of support.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq (and small caps) have been lagging and yesterday was no exception as the index fell another 0.5%. There is a case for drawing a falling wedge formation and that could be a bullish sign if looking for a silver lining.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Today is the 20th trading day in March and this year there are only 21 trading days in the month. We are hitting an historical weak spot if that's any indication of how March will end.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
April is actually a pretty good month historically, although the first few days are not quite as bullish as we have seen in the first few days in other months. Just look at the first few days in the March chart above for a comparison. Overall, there are very few weak spots in the April and it is the last month of the stronger 6-month stretch of the year. November through April do much better - average returns-wise - than May through October.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds were higher Thursday and the TLT closed above the recent sideways trading range for a second straight day. The 7 to 10-year ETF (IEF) is still within its range rising.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That's all for today. The market looks to be an an important juncture where we'd expect support to hold on some of the major indices and begin to rally again. Or support will break and we'll start a downtrend. Right now the leaders (small caps and Nasdaq) may be pointing toward the latter, but they tend to be more volatile and I'd expect a hold or break on the S&P 500 index to be more meaningful.
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Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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