02/05/26
The action recently has been cringe-worthy. Nothing is broken yet, but many charts are flirting with trouble. The Dow had another good day but the broader indices were down again yesterday, and this time the small caps and I-fund were taken down with them. There was some buying at key support levels again in the afternoon, but that floor continues to get tested.
Google (Alphabet) reported earnings after the closing bell yesterday, and it was trading all over the place. It initially fell 8%, but later I saw it up over 2% at one point, and it has been everywhere in between as the numbers get digested. A 2% move probably won't have too much of an impact on the stock market, but they mentioned a dramatic increase in CapX (Capital Expenditure) spending and that sent some of their business partners higher, like Broadcom and Nvidia.
Amazon is reporting after the closing bell today. This is not a recommendation (although full disclosure, I do own some) but the long term chart is ready for a big move, in one direction or the other, after a long consolidation. The earnings may point us in the direction. The prior quarter's report did the old pop and drop - failed breakout - in November. The prior Mag 7 reports have not been helping the indices.
The charts above look solid, and there is a cup and handle formation that looks bullish, but does the weekly need another test of the 200-week moving average (bottom chart?)
Advancing stocks actually outnumbered decliners on the NYSE yesterday, but the Nasdaq continues to lag badly. Because of the Mag 7 weakness, the Nasdaq 100 hit a double top at the end of January, and it's been straight down since.
Compare that to the Dow Jones, which is still flirting with making a new high, and investors are scratching their heads looking for direction from the broader market.
The S&P 500 (C-fund) came back down below the 50-day average again, then retested the support of the bottom of that blue trading channel, and held before rebounding. It's not exactly encouraging action, but it never is at the bottom of a range. Nobody knows if it will hold or not, but buying the dips sounds like an easy strategy, but it is never comfortable when it is happening, because at some point we know it could fail, and when charts do break support, the downside can accelerate. Buy here, or is the trend ready to break?
Of course the same is true near the top of a channel when the bulls feel invincible, but it is often a time to take profits. This is why being a contrarian can be a good strategy, but it works best at extremes when it is the most difficult to act.
I know I'm obsesses with this index, but the market leader that tends to react to economic changes before the rest of the market, was up big yet again yesterday. The Dow Transportation Index enjoyed its 3rd straight 2% gain yesterday.
The dollar was up sharply again and the volatility in the dollar is higher than it has been in a while. UUP remains below the 50-day average, above the 200-day average, and it made its way back above that old red support line that it fell through last month. It is now trading near 27 which seems to be a home base that it continues to come back to after some volatility.
The 10-year Treasury Yield is in a new range, and those ranges are slowly creeping up, which is better than quick moves, which tend to scare the stock market.
The January Jobs Report scheduled to be released this Friday, has been rescheduled for Wednesday February 11th.
Additional TSP Fund Charts:
The DWCPF (S-fund) retested support and the 50-day average, and it is holding, but causing some intraday concern. The filled gap has held for a second day, but the bulls probably don't want to see the chart hanging around this area for too much longer.
ACWX (I fund) held onto a gain for most of the day, but relented and ended the day with a modest loss, and the 0.33% rally in the dollar didn't help. The bullish trading channel does remain intact.
BND (bonds / F-fund) was down slightly and it continues to cling to that 50-day average for support.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the 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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
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.
The action recently has been cringe-worthy. Nothing is broken yet, but many charts are flirting with trouble. The Dow had another good day but the broader indices were down again yesterday, and this time the small caps and I-fund were taken down with them. There was some buying at key support levels again in the afternoon, but that floor continues to get tested.
| Daily TSP Funds Return
More returns |
Google (Alphabet) reported earnings after the closing bell yesterday, and it was trading all over the place. It initially fell 8%, but later I saw it up over 2% at one point, and it has been everywhere in between as the numbers get digested. A 2% move probably won't have too much of an impact on the stock market, but they mentioned a dramatic increase in CapX (Capital Expenditure) spending and that sent some of their business partners higher, like Broadcom and Nvidia.
Amazon is reporting after the closing bell today. This is not a recommendation (although full disclosure, I do own some) but the long term chart is ready for a big move, in one direction or the other, after a long consolidation. The earnings may point us in the direction. The prior quarter's report did the old pop and drop - failed breakout - in November. The prior Mag 7 reports have not been helping the indices.
The charts above look solid, and there is a cup and handle formation that looks bullish, but does the weekly need another test of the 200-week moving average (bottom chart?)
Advancing stocks actually outnumbered decliners on the NYSE yesterday, but the Nasdaq continues to lag badly. Because of the Mag 7 weakness, the Nasdaq 100 hit a double top at the end of January, and it's been straight down since.
Compare that to the Dow Jones, which is still flirting with making a new high, and investors are scratching their heads looking for direction from the broader market.
The S&P 500 (C-fund) came back down below the 50-day average again, then retested the support of the bottom of that blue trading channel, and held before rebounding. It's not exactly encouraging action, but it never is at the bottom of a range. Nobody knows if it will hold or not, but buying the dips sounds like an easy strategy, but it is never comfortable when it is happening, because at some point we know it could fail, and when charts do break support, the downside can accelerate. Buy here, or is the trend ready to break?
Of course the same is true near the top of a channel when the bulls feel invincible, but it is often a time to take profits. This is why being a contrarian can be a good strategy, but it works best at extremes when it is the most difficult to act.
I know I'm obsesses with this index, but the market leader that tends to react to economic changes before the rest of the market, was up big yet again yesterday. The Dow Transportation Index enjoyed its 3rd straight 2% gain yesterday.
The dollar was up sharply again and the volatility in the dollar is higher than it has been in a while. UUP remains below the 50-day average, above the 200-day average, and it made its way back above that old red support line that it fell through last month. It is now trading near 27 which seems to be a home base that it continues to come back to after some volatility.
The 10-year Treasury Yield is in a new range, and those ranges are slowly creeping up, which is better than quick moves, which tend to scare the stock market.
The January Jobs Report scheduled to be released this Friday, has been rescheduled for Wednesday February 11th.
Additional TSP Fund Charts:
The DWCPF (S-fund) retested support and the 50-day average, and it is holding, but causing some intraday concern. The filled gap has held for a second day, but the bulls probably don't want to see the chart hanging around this area for too much longer.
ACWX (I fund) held onto a gain for most of the day, but relented and ended the day with a modest loss, and the 0.33% rally in the dollar didn't help. The bullish trading channel does remain intact.
BND (bonds / F-fund) was down slightly and it continues to cling to that 50-day average for support.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the 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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
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.
