With the help from a falling dollar, stocks and almost every other commodity were up on Friday. The Dow gained 169-points, which was actually quite a bit off the highs, while the Nasdaq, small caps, bonds, gold, crude oil, wheat, you name it, were all up on Friday.
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Since it is so sensitive to the dollar's swings, the I-fund led the stocks funds in a big way gaining 2% on the day, and was up 4% on the week. Bonds were also up on Friday as investors are backing off from their fear of higher interest rates in the short-term.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart of the S&P 500 is still riding upward and the support line was successfully tested a couple of weeks ago.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) made news highs but is possibly extended. That doesn't mean it will reverse down and correct, but the easier money may have already been made in the last week or two - to those brave enough to to have bought that last pullback to the 50-day EMA. I would like to see volatility decrease with small steady gains, rather than these crazy wide trading ranges we've been seeing.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq gapped up on Friday morning and also posted new 52-week highs, and got a little closer to it's all-time highs made in 2000. The open gap should get some attention this week, and the rising wedge is looking like a potential concern.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index is still lagging a bit but we're looking at a possible quadruple top (although it is descending slightly.) Double tops tend to produce pullbacks. Triple tops usually don't hold for very long and breakout, so I'd be very surprised if this 4th test fails near 9200.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) took advantage of the drop in the dollar on Friday and gapped to the upside making another higher high, and we saw a 2% gain in the I-fund.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The dollar rebounded sharply on Thursday, from the Fed triggered sell-off on Wednesday, but Friday saw the dollar sellers show up again and this is why we saw so much green in stocks and commodities on Friday.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was up Friday and we may be seeing a little bull flag trying to form. It's in a new narrow rising trading channel so we'll have to see if investors continue to buy bonds now that the Fed has backed off a bit from their imminent rate hike talk.
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 TSP Talk Market Commentary
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