Google's earnings set the tone for Tuesday's open but it turned into a turnaround Tuesday depending on the index, so that's a bit of a red flag for the short-term. The Dow gained an impressive 198-points on the day, closing just off the day's highs, but it was the broader market indices that rolled over after the strong open.
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The S&P 500 gave up nearly all of a 1% opening gain before a late rally pushed it higher into the close to secure a 13-point gain on the day, or +0.48%.
Small caps were up about 0.50% at the open and ended the day down 1.0% so that was a full turnaround and the chart has the negative outside reversal day pattern to prove it.
This was the type of action that we talked about in Tuesday's commentary where we said Alphabet (Google) may hold onto it's gains, but look for profit taking if the other indices went up in sympathy with GOOG in early trading.
That's what we tend to see during July earnings season, although stocks have held up fairly well this July, so yesterday's reversal action may be the start of some profit taking. At least that's what a negative reversal day would be trying to tell us. It's not usually just a short-term indicator, however.
The S&P 500 / C-fund gapped up sharply and we were looking at a nearly 1% gain out of the gate on Tuesday. Nearly all of that gain was lost by early afternoon, but a late rally took it back to a solid gain, although still well off the highs. We've seen these kind of "gap traps" before this year - marked with red arrows. The green arrow shows the prior gap that was opened, but it is still open - it was not a short-term trap like the others.
The small caps (S-fund) had an awful negative reversal and it was an outside reversal day after the index nearly made a new all-time high before reversing down and ended the day down 1%.
With the S&P 500 closing higher, the VIX was actually down 1.7% yesterday, but the Volatility Index of the Russell 2000 small caps Index was up 9.2% on the day.
The Dow Transportation Index also created a negative outside reversal day as the big bear flag continues to develop. It found support at the 50-day EMA yesterday so that looks like a key level, otherwise the bottom of the flag may get tested next.
The EAFE Index (I-fund) gapped up with the rest of the U.S. Indices, then lost steam, but still ended with a decent gain. It filled one gap (blue) opened another small gap (red) near 68.25, but it is also trying to fill an open gap from June near 69.00.
The AGG (Bonds / F-fund) was up slightly after Monday's big decline. It found support at the 50-day EMA, but technically it broke down from the rising support line.
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
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
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 use additional methods and strategies to determine fund positions.
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[TD="align: center"]
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The S&P 500 gave up nearly all of a 1% opening gain before a late rally pushed it higher into the close to secure a 13-point gain on the day, or +0.48%.
Small caps were up about 0.50% at the open and ended the day down 1.0% so that was a full turnaround and the chart has the negative outside reversal day pattern to prove it.
This was the type of action that we talked about in Tuesday's commentary where we said Alphabet (Google) may hold onto it's gains, but look for profit taking if the other indices went up in sympathy with GOOG in early trading.
That's what we tend to see during July earnings season, although stocks have held up fairly well this July, so yesterday's reversal action may be the start of some profit taking. At least that's what a negative reversal day would be trying to tell us. It's not usually just a short-term indicator, however.
The S&P 500 / C-fund gapped up sharply and we were looking at a nearly 1% gain out of the gate on Tuesday. Nearly all of that gain was lost by early afternoon, but a late rally took it back to a solid gain, although still well off the highs. We've seen these kind of "gap traps" before this year - marked with red arrows. The green arrow shows the prior gap that was opened, but it is still open - it was not a short-term trap like the others.
The small caps (S-fund) had an awful negative reversal and it was an outside reversal day after the index nearly made a new all-time high before reversing down and ended the day down 1%.
With the S&P 500 closing higher, the VIX was actually down 1.7% yesterday, but the Volatility Index of the Russell 2000 small caps Index was up 9.2% on the day.
The Dow Transportation Index also created a negative outside reversal day as the big bear flag continues to develop. It found support at the 50-day EMA yesterday so that looks like a key level, otherwise the bottom of the flag may get tested next.
The EAFE Index (I-fund) gapped up with the rest of the U.S. Indices, then lost steam, but still ended with a decent gain. It filled one gap (blue) opened another small gap (red) near 68.25, but it is also trying to fill an open gap from June near 69.00.
The AGG (Bonds / F-fund) was up slightly after Monday's big decline. It found support at the 50-day EMA, but technically it broke down from the rising support line.
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
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
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 use additional methods and strategies to determine fund positions.
