Stocks rallied on Tuesday after G20 finance ministers stated they are prepared to use monetary and fiscal policy to held the slowing global economic growth. The Dow gained 140-points and many indices are now within a stone's throw of new highs.
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The I-fund lagged, while the big caps outperformed, and bonds were down again. With interest rates so low, the G-fund has been up less than 0.0045% on some days and rounded, that makes it show as a 0.00% daily gain on the AutoTracker - if you were wondering.
The SPY (S&P 500 / C-fund) made it six consecutive closes above the 50-day EMA, and that's a decent confirmation that it is not going to be another fake-out. The descending resistance line of the wedge formation was tested and held as support after the breakout. This is textbook bullish technical analysis. A breakout to new highs would help.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) had a good day on Tuesday, but the small caps lagged their larger sibling indices. It managed to move back above the 1070 area and posted its second highest closing rice ever.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq 100 (QQQ) hasn't quite broken out like the S&P 500, but it did lead on the upside with yesterday's 1.56% gain. The 6 closes above the 50-day EMA is a plus but the bulls will want to see this tech heavy index lead on the upside if the bull market is going to continue.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) bounced back after filling the open gap on Monday. The new formation looks like a possible new bull flag. We should find out fairly soon because it will have to move back above the 200-day EMA to breakout.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
How much of the recent market rally is due to the price of oil rebounding remains to be seen. But oil was down sharply early yesterday before closing off the lows. It has been able to hold above the 20-day EMA all month, and it also found support at the $50 mark. If this starts to decline again a move back to a 4-handle (< $50), the stock market could be put to the test to see if it is are still coupled with the price of oil.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) continued its fall from recent highs and the small open gap remains open with not much of an effort to see it filled. The 50-day EMA is the next downside target, and the AGG has held above that since its brief break below it last September.
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 www.tsptalk.com/comments.php
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