Stocks were mostly down yesterday, but depending on the index you were watching, the losses were not shared equally. The large caps were down modestly, the Nasdaq 100 (QQQ) was up, but small caps of the Russell 2000 lost 1.2% and the Dow Transportation Index plummeted 2.6%. Overall there were about 3 stocks down on the day, for every one that was up.
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Volume was fairly light in front of today's FOMC meeting and last night's after-hours earnings report from Apple, which came in better than expected, as it almost always does, but the reaction was not overly impressive.
The SPY (S&P 500 / C-fund) nearly filled Friday's open gap, but not quite. Technically, it has improved greatly over the last several weeks but there is some overhead resistance - although it's rising. The 200-simple moving average (not shown) was taken out last week. So the concern is not here, unless the large caps move down in sympathy with the small caps, which continue to struggle.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (small caps / S-Fund) lost 0.86% yesterday and remains below the neckline of the inverted head and shoulder and 50-day EMA. Technically, there are some issues, but as long as it stays in the right shoulder (RS) of the H&S, then it's possible that the breakout could be to the upside, but of course it must get above the double dose of resistance first.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index has failed again at the 200-day EMA and seems to be playing a little ping pong with the 50-day EMA, which it closed slightly below for the first time in 3-weeks.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq 100 (QQQ) has been leading during this rally, and is actually close to making new highs. But it opened a large gap last week and if you can see on the 2-year chart, gaps don't tend to remain open. Most get filled sooner rather than later, but that's not always the case as we saw the one from last October finally get filled just this August.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) has pulled back from the 200-day EMA and yesterday's weakness had it fall below the old resistance line, which we saw holding as support for a couple of days before yesterday's breakdown. It's not a horrible chart but of course it really needs to get above the 200-day EMA before we can get more bullish here.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) was up slightly and is nearing the 110 area that seems to be a tough area to crack on a closing basis. Perhaps the Fed will say something to push it above? But then again, why are bonds going up anyway, if interest rates hikes are on the horizon?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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