Despite being quite overbought, stocks rallied again. Everyone seems to be waiting for the rug to be pulled out from under it, but this market refuses to die. The Dow gained 93-points, while small caps led the way, and the I-fund had to pay some bills.
[TABLE="width: 79%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The SPY (S&P 500) reversed early losses and ended the day with a solid gain, but for a fourth straight day it was unable to make a new high. This looks like a good place for a pullback, but as I talked about earlier this week, based on the patterns we saw in 2013, I think we could see new highs first, then, when investors are all leaning on the bullish side, we'll get a second wave of selling.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Small caps had a very nice day on Thursday and the recent ascending trading channel is still intact, but there is a little resistance going on here near 116 on this small cap ETF.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq 100 (QQQ) is the only major index in new high territory and the recent 2-day dip may be the start of a bull flag - which tend to break up - but we'd want to see the old January to hold on any continued pullback.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation Index has been lagging badly and was hit hard earlier this week, but it did have a nice day on Thursday gaining 1.5% on the day. I continue to mention the large open gap on this chart because we know gaps have a strong tendency to get filled, so I'm leaning toward being bullish on this leading index - at least until that gap is filled.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds bounced around on Thursday and with the longer-term bonds (TLT) falling back below the 200-day EMA, and the shorter-term bonds (IEF) finding support on the 200-day EMA, we still have some indecision here about whether bonds want to rally or pull back.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As earnings season winds down, and with there being another couple of weeks before the next jobs report, the market may be a little directionless for a while. Until then, the last week in February isn't all that positive historically, but the first few days in March are historically quite strong.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey Results and its 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! Have a great weekend!
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.
