Stocks were flat to lower on Wednesday, but they did close well off the morning lows showing some ability to hold at support. But the buying dried up quickly and the bulls are obviously not ready to pounce like they did in 2013.
The Dow lost 5-points while the S&P fell 4, the Nasdaq lost about .5%, and small caps lagged, and the I-fund eked out a small gain. Bonds pulled back.
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The S&P 500 (SPY) fell to Monday's lows at the open, but for a second straight day it was able to rebound from that level, which is an area that the bulls would really like to see hold.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The annual chart shows the rising support line that is trying to hold. The 20-day EMA crossed below the 50-day EMA yesterday and that is not the greatest intermediate-term sign, but it could be an indication of short-term oversold conditions.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 1929 comparison chart continues to give us something to worry about, but even on this chart there was a sharp rally after the initial push lower. If the comparison continues, that rally would turn out to be a great selling opportunity.
Chart source: www.mcoscillator.com, analysis by TSP Talk
Bonds (F-fund) pulled back and the TLT fell out of the rising trading channel. The 200-day EMA will be a good test for the bond market. Bear markets don't stay above the 200-day EMA very long, so it's possible that the bear market is over for bonds, but those 200-day EMAs will have to hold to prove that.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 30-year bond is back above the 200-day EMA and it also broke out above its trading channel. The 10-year is still testing its trading channel, but did get support from its 200-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This could be a sign that the relief rally in bonds is in trouble, or it could just be a temporary pause after a 5-week rally in bonds.
The January jobs report comes out on Friday and consensus estimates are looking for a gain of about 175,000 jobs, and an unemployment rate of 6.7%. We have our monthly jobs report contest going on right now in the forum. More info: http://www.tsptalk.com/mb/jobs-reports-contests/19621-jan-14-jobs-report-contest.html.
Administrative Note: RevShark is offering a free trial to TSP Timing this week. No payment information is needed. You just need to create a login to the Premium Service area, if you don't already have one. Here's more information.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey Results and its 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 TSP Talk Market Commentary
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