Stocks have been quiet lately and yesterday the S&P 500 put in its 3rd move of less than 2-points in the last 4 trading days. Momentum may have slowed but we still get pockets of strength as we saw the Dow gain 68-points with the help from a boost in Boeing's stock yesterday, and also the Nasdaq did well. After the bell we some important earnings reports were released but there was no consistency as some boosted stock prices while others were sold.
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IBM and Netflix were down modestly after-hours while a couple of large transportation related stocks were rallying so we may see more back and forth as the bulls and bears battle it out. Lately it has been the bulls winning these battles and even yesterday when there was some selling in the last hour of trading, the bulls were there to push the indices higher into the final minutes before the close. That was magnified in yesterday's Nasdaq intraday chart.
Despite what I see as an overvalued market, I hate to compare it to the dot com bubble since that was so extreme, but if you remember those days, companies were shooting higher every day despite the fact that they made no money, but had an online presence. Today's stock market seems to be driven by online streaming movie companies, social media stocks, and search engine advertising companies. Just take a look at the FANG stocks that have been leading the market for years now.
Yes, these companies are taking in tons of money, but they're based on us staring at PC, TV, and cell phone screens. Amazon is retail and they are certainly making money and still growing fast, but many complain that they pay no corporate income taxes which accounts for much of their profits.
It's a different world out there today from the one I grew up in, but as long as I have been watching the stock market price to earnings ratios matter, overvalued markets have eventually corrected, and right now we're near historically high valuations. That doesn't mean stocks have to fall today or this week, but because stocks tend to go down a lot faster than they went up, it's always easier to sell when you can, and not when you have to.
The indexes that we follow barely moved yesterday so I'll make the charts section brief today.
Quick note about Friday per www.tsp.gov: "Some financial markets will be closed on Friday, April 19 in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (April 19) will be processed Monday night (April 22), at Monday's closing share prices."
Because of that, we'll take the day off and there will be no commentary on Friday.
The S&P 500 (C-fund) keeps riding the resistance line higher and the bears are being lulled to sleep. As I mentioned above, stocks tend to move down faster than they moved up, but they can go up a lot longer than we'd expect, as we have seen. But eventually something will spook the market and those gaps will get filled in a hurry.
The DWCPF (S-fund) remains above the February highs and has since the breakout, but yesterday's action actually broke below the rising support line so we'll see how EOD (end of day) traders react to that today.
The AGG (Bonds / F-fund) hit that 108 area that I have been mentioning as a pullback target, where the rising support line met the open gap. The gap didn't quite get filled and that's still a good possibility, but for all practical purposes it may have satisfied those looking for a pullback. The 50-day EMA is at 107.50 so that's another potential target should the downside continue.
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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[TR]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[TD]
[/TD]
[TD="align: center"]
[/TR]
[/TABLE]
IBM and Netflix were down modestly after-hours while a couple of large transportation related stocks were rallying so we may see more back and forth as the bulls and bears battle it out. Lately it has been the bulls winning these battles and even yesterday when there was some selling in the last hour of trading, the bulls were there to push the indices higher into the final minutes before the close. That was magnified in yesterday's Nasdaq intraday chart.
Despite what I see as an overvalued market, I hate to compare it to the dot com bubble since that was so extreme, but if you remember those days, companies were shooting higher every day despite the fact that they made no money, but had an online presence. Today's stock market seems to be driven by online streaming movie companies, social media stocks, and search engine advertising companies. Just take a look at the FANG stocks that have been leading the market for years now.
Yes, these companies are taking in tons of money, but they're based on us staring at PC, TV, and cell phone screens. Amazon is retail and they are certainly making money and still growing fast, but many complain that they pay no corporate income taxes which accounts for much of their profits.
It's a different world out there today from the one I grew up in, but as long as I have been watching the stock market price to earnings ratios matter, overvalued markets have eventually corrected, and right now we're near historically high valuations. That doesn't mean stocks have to fall today or this week, but because stocks tend to go down a lot faster than they went up, it's always easier to sell when you can, and not when you have to.
The indexes that we follow barely moved yesterday so I'll make the charts section brief today.
Quick note about Friday per www.tsp.gov: "Some financial markets will be closed on Friday, April 19 in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (April 19) will be processed Monday night (April 22), at Monday's closing share prices."
Because of that, we'll take the day off and there will be no commentary on Friday.
The S&P 500 (C-fund) keeps riding the resistance line higher and the bears are being lulled to sleep. As I mentioned above, stocks tend to move down faster than they moved up, but they can go up a lot longer than we'd expect, as we have seen. But eventually something will spook the market and those gaps will get filled in a hurry.
The DWCPF (S-fund) remains above the February highs and has since the breakout, but yesterday's action actually broke below the rising support line so we'll see how EOD (end of day) traders react to that today.
The AGG (Bonds / F-fund) hit that 108 area that I have been mentioning as a pullback target, where the rising support line met the open gap. The gap didn't quite get filled and that's still a good possibility, but for all practical purposes it may have satisfied those looking for a pullback. The 50-day EMA is at 107.50 so that's another potential target should the downside continue.
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.
