Another sell-off on Wall Street and the Dow continues to pile up the triple digit moves. Yesterday's was a 273-point loss. The U.S. indices lost about 1.5%. They are blaming weak economic data out of Germany and the IMF lowering global growth estimates.
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The I-fund held up slightly better with dollar slipping a bit, but it may need some help today. Investors put money in bonds helping the F-fund to a 0.3% gain.
Alcoa kicks off earnings season after the close today (Wednesday) and that should be a nice distraction from the geopolitical environment the market has been clinging to.
The SPY (S&P 500 / S-fund) did not quite reach last Thursday's intraday lows, but it did close at a new two-month low. The chart is breaking down and shooting us warning signs, but it is oversold and if we rebound similarly to what happened in August, the snap back rally could be strong. That is unless something bigger is brewing that we don't know about yet.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
When the action gets ugly you have to pull back a little and take a broader look at what it happening. Since the start of 2013, the SPY has held at, or only briefly broke below, the 100-day EMA. Yesterday's action took it below for a second time in the last 4 trading days. It's a concern if it can't recover quickly, but how happy would you have been buying (or just being in the stock funds) every time it hit the 100-day EMA over the last nearly two years?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart says the same thing: Possibly a good buying opportunity if the trend of the last two years can hold. This is a mid-term election year and it would be unusual if stocks continued to sell off leading up to the election in four weeks.
Chart provided courtesy of www.stockcharts.comm, analysis by TSP Talk
The Wilshire 4500 (S-fund) tested the 200-day EMA during last Friday's big rally and Monday's positive open, but it seems to have failed having fallen back toward last Thursday's lows. Ugly chart. If we're going to stay in a bull market this should be near the lows. Otherwise, this and the Russell 2000 are the canary in the coal mine for the broader indices.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) is in even worse shape than the small caps as the economic numbers in Europe have been struggling. One thing the I-fund can hope for is a pull back in the dollar, which might help it outperform the U.S. funds, but the dollar's trend is still up despite two down days this week.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) benefited from the sell-off in stocks and actually broke out above August's highs. Just 2 to 3 weeks ago, I would have never seen this coming. But now they have to hold above those highs, and with that open gap below, I have my doubts this new high will stick - unless stocks are really rolling over this time.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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