We finally saw a little fatigue from investors but trading volume was quite low heading into a holiday weekend so it didn't feel very serious. There's some overhead resistance on the charts and a pullback, or some sideways action, would probably be more helpful than concerning over the next few days. More weakness in the dollar had the I-fund leading on the upside again.
Just a day after the market shook off the Moody's downgrade and a Monday morning sell off, stocks showed some weakness, or at least broke a 6-day winning streak with a moderate loss on Tuesday.
The S&P 500 (C-fund) slipped 0.39% and trading volume continues to dry up as we get closer to the first summer holiday weekend, and as we often talk about, market trends tend to reverse leading into these long holiday weekends. As quickly and consistently as stocks have been rising, some backing and filling may be just what the doctor ordered to keep this rally healthy.
The breakdown candlestick on the first trading day in March was tested recently and it is holding as resistance, which is typical behavior, and again, a pullback here would be almost textbook. It may not feel good, but if the S&P 500 fell all the way down to 5750 or 5700, it would actually do this chart a lot of good because a chart with little support is much more vulnerable to bigger declines. Of course the bulls would want to see those levels, and the 50-day EMA near 5670, hold to keep the ascending channel intact. Anything below that would get dicey.
But maybe I am getting ahead of myself because many money managers are still underinvested having missed most of this rally off the lows, and they are likely to do some buying before we see 5670 or even 5700.
The 10-year Treasury Yield was fairly flat after another morning rally turned south, and that's good news as the overhead resistance continues to hold. This is getting a little lofty and could be an issue, but yields could also go up if the economy strengthens so just staying in the vicinity, although a little higher than it has been, would be fine. There's wiggle room on the downside but we don't get much economic data until next week so it may just be floundering this week.
The dollar was down again and it continues to test some rising support after failing at some key resistance levels over the last week or two. The recent pullback in the dollar has given the I-fund some life again after a short pullback.
This chart is quite old but the holiday action is typical surrounding major holiday weekends. We can see here that there tends to be weakness the week leading up to Memorial Day Weekend, and a bounce back the week after. It's one of those pre-holiday reversals and the major trend tends to resume after the holiday.
Source: www.sentimentrader.com
With the weather getting warmer, the holiday weekend coming up, and the market seemingly in better form, the quiet action may be exactly what the bulls want to see, and a modest pullback to clean up the charts wouldn't be so bad.
The DWCPF (S-fund) has actually done a good job of consolidating its recent gains by moving sideways within the rising trading channel. 2100 would be a nice place to do some buying near the 50-day average, but holding above that may even be less nerve-wracking as a move to 2100 would break the trading channel.
ACWX (I-fund) keeps on keep'in on and is making new highs almost daily. This is one of those charts that I warned about up top where support is very thin making it dangerous if there is an issue. Other than that, the trend is as strong as an ox, and the dollar is cooperating.
Whether that red support line on UUP holds or not may determine if the I-fund can continue to drift higher.
BND (bonds / F-fund) was down again but it traded within Monday's range and is still looking for support near 72, with possible resistance at the 50-day EMA near 72.50.
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
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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.
| Daily TSP Funds Return More returns |
Just a day after the market shook off the Moody's downgrade and a Monday morning sell off, stocks showed some weakness, or at least broke a 6-day winning streak with a moderate loss on Tuesday.
The S&P 500 (C-fund) slipped 0.39% and trading volume continues to dry up as we get closer to the first summer holiday weekend, and as we often talk about, market trends tend to reverse leading into these long holiday weekends. As quickly and consistently as stocks have been rising, some backing and filling may be just what the doctor ordered to keep this rally healthy.
The breakdown candlestick on the first trading day in March was tested recently and it is holding as resistance, which is typical behavior, and again, a pullback here would be almost textbook. It may not feel good, but if the S&P 500 fell all the way down to 5750 or 5700, it would actually do this chart a lot of good because a chart with little support is much more vulnerable to bigger declines. Of course the bulls would want to see those levels, and the 50-day EMA near 5670, hold to keep the ascending channel intact. Anything below that would get dicey.
But maybe I am getting ahead of myself because many money managers are still underinvested having missed most of this rally off the lows, and they are likely to do some buying before we see 5670 or even 5700.
The 10-year Treasury Yield was fairly flat after another morning rally turned south, and that's good news as the overhead resistance continues to hold. This is getting a little lofty and could be an issue, but yields could also go up if the economy strengthens so just staying in the vicinity, although a little higher than it has been, would be fine. There's wiggle room on the downside but we don't get much economic data until next week so it may just be floundering this week.
The dollar was down again and it continues to test some rising support after failing at some key resistance levels over the last week or two. The recent pullback in the dollar has given the I-fund some life again after a short pullback.
This chart is quite old but the holiday action is typical surrounding major holiday weekends. We can see here that there tends to be weakness the week leading up to Memorial Day Weekend, and a bounce back the week after. It's one of those pre-holiday reversals and the major trend tends to resume after the holiday.
Source: www.sentimentrader.com
With the weather getting warmer, the holiday weekend coming up, and the market seemingly in better form, the quiet action may be exactly what the bulls want to see, and a modest pullback to clean up the charts wouldn't be so bad.
The DWCPF (S-fund) has actually done a good job of consolidating its recent gains by moving sideways within the rising trading channel. 2100 would be a nice place to do some buying near the 50-day average, but holding above that may even be less nerve-wracking as a move to 2100 would break the trading channel.
ACWX (I-fund) keeps on keep'in on and is making new highs almost daily. This is one of those charts that I warned about up top where support is very thin making it dangerous if there is an issue. Other than that, the trend is as strong as an ox, and the dollar is cooperating.
Whether that red support line on UUP holds or not may determine if the I-fund can continue to drift higher.
BND (bonds / F-fund) was down again but it traded within Monday's range and is still looking for support near 72, with possible resistance at the 50-day EMA near 72.50.
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.
