The stock market rally continued on Wednesday, but it was a choppy day with the indices dipping into negative territory before closing positive, but well off the the opening highs, The market is still on the CPI rush as it looks like the Fed will be cutting rates next month, although not everyone agrees. New highs are holding so we have to respect the strength, but clearly there are extremes that demand we should be on our guard. It's a case of momentum vs. reality.
What kind of stock market are we in? Yesterday a new IPO (Initial Public Offering) started trading. It closed 41% off its intraday high, so it must have been a flop, right? The IPO price was 37, if you were in on the IPO. It closed at 68. See where I'm going?
For those who were not able to get in on the IPO price saw the stock open at 90 a share at 1 PM ET, so it opened 143% above that IPO price. It got as high as 118, and it closed at 68, which was 41% below the intraday high, and 24% below the opening price, but 84% above the IPO price. This was in just three hours of trading!
The name of the company is the ironic part: "Bullish" (Symbol: BLSH), and it is a cryptocurrency exchange operator.
So I think we've entered the Dot Com type of action. Eventually the bubble will burst and normalcy will return but that doesn't mean it will burst from this current level. The Dot Com fun and games lasted for years.
Back then, some people got rich, and sold everything at the right time. Others rode the wave all the way up, and all the way down - that's the by and holders, so they may have broken even. Others got caught up after the hype was well into the bubble, held on and lost it all -well, most of it.
I'm not saying bitcoin is a bubble, nor a scam like many other believe. But rather it's the fringe companies that are trying to profit from the hype. Most will come and go and some will be big.
Companies like Amazon, Google, and eBay survived the Dot Com days and became market leaders,
... but there were a plethora of companies that came and went. Netscape? AltaVista? Ask Jeeves? Pets.com, even Yahoo even fell by the wayside, or came back to reality. And some may have been merged with other companies.
We've seen new crypto related companies that shot up, then rolled over, or how about the cannabis craze a few years ago? And of course the meme stocks went up, then down.
Again, this may not be the end of the bubble, but it's getting more obvious that something is going to have to give.
I like these types of markets for personal trading reasons, whether I hold a stock like these for hours, days, or even weeks, but I wouldn't want to buy and hold anything at these levels.
The charts are looking good once again, but it's the fundamentals that are coming into question. However, lower interest rates are a good reason for stocks to move up.
There's a big fire in the mountainside just above our neighborhood, and our power just went out so I'm now on a laptop with an internet connection using UPS backup power that's losing steam, so let me wrap this up.
We'll get the PPI report (Producer Prices) this morning before the opening bell. Sorry, I thought it was coming out yesterday.
The S&P 500 (C-fund) made a new high but the spinning top formation created yesterday can be a cautionary sign for the short-term. The late morning pullback did help fill in the opening gap.
The DWCPF / S-fund are sailing right now with the hopes of an interest rate cut next month. If the Fed does not cut, this could be a major trap. Otherwise, it may be time for the small caps to finally shine.
ACWX (I-fund) gapped up breaking out to new highs. The I-fund has bounced back nicely in August since stumbling at the end of July. It was after it established new highs in July when the price began it descent. How will it follow up on the new highs this time around?
BND (bonds / F-fund) gapped up today and was up with the stock indices. The assurance of lower borrowing costs that has fueled stocks over the last couple of days is also fueling bond prices. The F-fund's return was on par with what the C-fund had to offer.
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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What kind of stock market are we in? Yesterday a new IPO (Initial Public Offering) started trading. It closed 41% off its intraday high, so it must have been a flop, right? The IPO price was 37, if you were in on the IPO. It closed at 68. See where I'm going?
For those who were not able to get in on the IPO price saw the stock open at 90 a share at 1 PM ET, so it opened 143% above that IPO price. It got as high as 118, and it closed at 68, which was 41% below the intraday high, and 24% below the opening price, but 84% above the IPO price. This was in just three hours of trading!
The name of the company is the ironic part: "Bullish" (Symbol: BLSH), and it is a cryptocurrency exchange operator.
So I think we've entered the Dot Com type of action. Eventually the bubble will burst and normalcy will return but that doesn't mean it will burst from this current level. The Dot Com fun and games lasted for years.
Back then, some people got rich, and sold everything at the right time. Others rode the wave all the way up, and all the way down - that's the by and holders, so they may have broken even. Others got caught up after the hype was well into the bubble, held on and lost it all -well, most of it.
I'm not saying bitcoin is a bubble, nor a scam like many other believe. But rather it's the fringe companies that are trying to profit from the hype. Most will come and go and some will be big.
Companies like Amazon, Google, and eBay survived the Dot Com days and became market leaders,
... but there were a plethora of companies that came and went. Netscape? AltaVista? Ask Jeeves? Pets.com, even Yahoo even fell by the wayside, or came back to reality. And some may have been merged with other companies.
We've seen new crypto related companies that shot up, then rolled over, or how about the cannabis craze a few years ago? And of course the meme stocks went up, then down.
Again, this may not be the end of the bubble, but it's getting more obvious that something is going to have to give.
I like these types of markets for personal trading reasons, whether I hold a stock like these for hours, days, or even weeks, but I wouldn't want to buy and hold anything at these levels.
The charts are looking good once again, but it's the fundamentals that are coming into question. However, lower interest rates are a good reason for stocks to move up.
There's a big fire in the mountainside just above our neighborhood, and our power just went out so I'm now on a laptop with an internet connection using UPS backup power that's losing steam, so let me wrap this up.
We'll get the PPI report (Producer Prices) this morning before the opening bell. Sorry, I thought it was coming out yesterday.
The S&P 500 (C-fund) made a new high but the spinning top formation created yesterday can be a cautionary sign for the short-term. The late morning pullback did help fill in the opening gap.
The DWCPF / S-fund are sailing right now with the hopes of an interest rate cut next month. If the Fed does not cut, this could be a major trap. Otherwise, it may be time for the small caps to finally shine.
ACWX (I-fund) gapped up breaking out to new highs. The I-fund has bounced back nicely in August since stumbling at the end of July. It was after it established new highs in July when the price began it descent. How will it follow up on the new highs this time around?
BND (bonds / F-fund) gapped up today and was up with the stock indices. The assurance of lower borrowing costs that has fueled stocks over the last couple of days is also fueling bond prices. The F-fund's return was on par with what the C-fund had to offer.
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.
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