Stocks bounced back on a Turnaround Tuesday as all of Monday's losses were recaptured during Tuesday's rally. We've seen this before but this market continues to be tough to navigate, especially in our TSP with all of the limitations. The question going forward in this bearish, down trending market, is whether to sell the rallies. Making a bottom is usually a messy process and we won't have a full confirmation if the lows are in until the charts cross some T's and dot some I's, so it's at the current levels it is still a guessing game and the ones with the most foresight tends to win.
Yesterday after the closing bell yesterday President Trump said he has no intention of firing the Fed's Jerome Powell, and the suggestion of replacing Powell was a big reason for Monday's decline. Make of it what you will, volatility may turn your hair gray, but it can also create opportunities if you can be on the right side of it.
The futures soared after hours last night on this news so whether that holds or not into today's close will be very telling with the resistance the charts are facing.
The S&P 500 (C-fund) recaptured Monday's dramatic losses very quickly. It's not out of the woods yet as it is remains in a downtrend and below a thick confluence of resistance, so the bulls will have to follow through on the recent rally to improve the chart.
We still have a fairly good comparison to the 2020 bottom going on. However, there are some major differences. One is that in 2020 the Federal Reserve and the Federal Government threw everything at the market and the economy to stop the bleeding. So far there have been crickets from the Fed, but we could argue that this one was a self-inflicted bear.
Yields moved mostly sideways yesterday but bonds and the F-fund were able to tick higher yesterday. That 4.30% area has been stubborn support on the 10-year Treasury Yield, and now it is flirting with resistance near 4.45%.
The dollar moved higher yesterday, but it was merely trying to fill in Monday's open gap. That rally held the I-fund back a bit yesterday. It was still up substantially on the day, but the US indices did outperform.
Is this a 'risk on' market yet? Ask the Bitcoin traders. Take a look at this recent breakout in the popular crypto-currency. This chart peaked in January of this year and the S&P 500 made its all time high a month later in February. So, after months of trending lower, did this chart just signal an imminent bottom for the stock market as well?
Thanks for your patience over the last couple of days. Most of our technical issues after the server migration have been found and fixed, although I'm sure we'll find a few hiccups here and there.
DWCPF (S-fund) is also flirting with overhead resistance but I do like the bull flag that has been forming recently, as opposed to the peak and swift rollover we saw in mid-March. It's not a great looking chart but it may be trying to improve.
ACWX (I-fund) lagged the US indices yesterday but it did something yesterday that the US index charts have not done yet -- breakout above its descending resistance line. The dollar rebounded yesterday keeping some pressure on, but it was filling in a gap and the downside [in the dollar] may resume soon.
The BND (F-fund) was up modestly but yields remain buoyant and you can see the resistance this chart is currently dealing with.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
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
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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 may use additional methods and strategies to determine fund positions.
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Yesterday after the closing bell yesterday President Trump said he has no intention of firing the Fed's Jerome Powell, and the suggestion of replacing Powell was a big reason for Monday's decline. Make of it what you will, volatility may turn your hair gray, but it can also create opportunities if you can be on the right side of it.
The futures soared after hours last night on this news so whether that holds or not into today's close will be very telling with the resistance the charts are facing.
The S&P 500 (C-fund) recaptured Monday's dramatic losses very quickly. It's not out of the woods yet as it is remains in a downtrend and below a thick confluence of resistance, so the bulls will have to follow through on the recent rally to improve the chart.
We still have a fairly good comparison to the 2020 bottom going on. However, there are some major differences. One is that in 2020 the Federal Reserve and the Federal Government threw everything at the market and the economy to stop the bleeding. So far there have been crickets from the Fed, but we could argue that this one was a self-inflicted bear.
Yields moved mostly sideways yesterday but bonds and the F-fund were able to tick higher yesterday. That 4.30% area has been stubborn support on the 10-year Treasury Yield, and now it is flirting with resistance near 4.45%.
The dollar moved higher yesterday, but it was merely trying to fill in Monday's open gap. That rally held the I-fund back a bit yesterday. It was still up substantially on the day, but the US indices did outperform.
Is this a 'risk on' market yet? Ask the Bitcoin traders. Take a look at this recent breakout in the popular crypto-currency. This chart peaked in January of this year and the S&P 500 made its all time high a month later in February. So, after months of trending lower, did this chart just signal an imminent bottom for the stock market as well?
Thanks for your patience over the last couple of days. Most of our technical issues after the server migration have been found and fixed, although I'm sure we'll find a few hiccups here and there.
DWCPF (S-fund) is also flirting with overhead resistance but I do like the bull flag that has been forming recently, as opposed to the peak and swift rollover we saw in mid-March. It's not a great looking chart but it may be trying to improve.
ACWX (I-fund) lagged the US indices yesterday but it did something yesterday that the US index charts have not done yet -- breakout above its descending resistance line. The dollar rebounded yesterday keeping some pressure on, but it was filling in a gap and the downside [in the dollar] may resume soon.
The BND (F-fund) was up modestly but yields remain buoyant and you can see the resistance this chart is currently dealing with.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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 may use additional methods and strategies to determine fund positions.
