Stocks jumped out of the gate on Monday with some big gains, and held onto them into the close on the eve of a two-day Fed meeting. The major indices gained between about a half of a percent and 1%, while bonds were basically flat.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0189%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] +0.01%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] +0.63%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] +0.84%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] +0.69%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Today kicks off an important two-day FOMC meeting that may or may not produce an announcement of a tapering of Quantitative Easing (QE). It's almost a certainty that tapering will begin within the next few months, but the question is, will it start this week - or will we at least get more solid indication of when it will begin?
The S&P 500 (SPY) hit some overhead resistance yesterday before pulling back a bit, but in 2013, this type of resistance was been broken easily, time and time again. A small gap was created with the big positive open, and there is a hint of a negative reversal day after closing off the highs and closer to the opening price. This could mean a quick fill of the gap is coming in the next day or so.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow, and the next couple of charts are all showing the same thing: a short-term descending trading channel (red) at or near the overhead resistance. As I mentioned above, this kind of resistance was not very strong all year. Is it different this time? If we draw a parallel trading channel (black) using the September and November peaks and the November and December lows, we can see that the recent low makes some sense. It's a bit of an illusion but those two black line are really parallel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index closed below, and is testing, the recent short-term rising trading channel (blue). It's not quite at the resistance of the descending trading channel (red).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Tomorrow is day number -5 on the Christmas seasonality chart. It's a little choppy between now and Monday, but after that the real season strength kicks in. But as a reminder, last year we saw losses during that period so there's no guarantees.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bonds were basically flat by the close but the 7 to 10 year ETF below right, moved higher in early trading to fill the small open gap.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The charts still look bearish for bonds, but as I have been mentioning, bond market sentiment is getting extremely bearish which could produce a relief rally.
In today's TSP Talk Plus Report we look at the small caps and the short-term and intermediate-term indicators. 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 TSP Talk Market Commentary
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.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0189%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] +0.01%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] +0.63%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] +0.84%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] +0.69%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Today kicks off an important two-day FOMC meeting that may or may not produce an announcement of a tapering of Quantitative Easing (QE). It's almost a certainty that tapering will begin within the next few months, but the question is, will it start this week - or will we at least get more solid indication of when it will begin?
The S&P 500 (SPY) hit some overhead resistance yesterday before pulling back a bit, but in 2013, this type of resistance was been broken easily, time and time again. A small gap was created with the big positive open, and there is a hint of a negative reversal day after closing off the highs and closer to the opening price. This could mean a quick fill of the gap is coming in the next day or so.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow, and the next couple of charts are all showing the same thing: a short-term descending trading channel (red) at or near the overhead resistance. As I mentioned above, this kind of resistance was not very strong all year. Is it different this time? If we draw a parallel trading channel (black) using the September and November peaks and the November and December lows, we can see that the recent low makes some sense. It's a bit of an illusion but those two black line are really parallel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index closed below, and is testing, the recent short-term rising trading channel (blue). It's not quite at the resistance of the descending trading channel (red).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Tomorrow is day number -5 on the Christmas seasonality chart. It's a little choppy between now and Monday, but after that the real season strength kicks in. But as a reminder, last year we saw losses during that period so there's no guarantees.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Bonds were basically flat by the close but the 7 to 10 year ETF below right, moved higher in early trading to fill the small open gap.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The charts still look bearish for bonds, but as I have been mentioning, bond market sentiment is getting extremely bearish which could produce a relief rally.
In today's TSP Talk Plus Report we look at the small caps and the short-term and intermediate-term indicators. 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 TSP Talk Market Commentary
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.
I know, I post it late Monday night , but that's Tuesday's commentary so "tomorrow" is Wednesday.
