Stocks were mixed on Wednesday after another decent CPI report but it looks like there was some profit taking going on after the big relief rally, which triggered some weakness in the broader indices. The Dow recaptured the 40K mark and the S&P 500 and other indices have now completed a run up to their 50-day moving averages. Small caps lagged again as growth has come into question, and bonds rallied again as yields continue to slide lower.
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Yesterday's action was OK. Maybe it was a needed stall for the broader indices before another move toward the recent highs, or maybe it was plain fatigue before the indices rollover. It's tough to say, but we did have some decent data yesterday, however it's just a repeat of what we have been seeing for a couple of weeks. We all know inflation has gotten better. Maybe a little sticky on the Core CPI data yesterday, but certainly not troublesome.
The Nasdaq lagged yesterday as there were mixed results from the Magnificent 7 stocks, but more broadly it was on the negative side. We also saw a lot more new 52-week lows than highs, and that's interesting because the Nasdaq Composite is about 4000 points higher than it was a year ago, so once again big tech has done most of the lifting here.
Apparently the move in the VIX (Volatility Index) from a close above 35 last Monday, to the close below 17 yesterday, was the fastest decline in history. What happened after those prior rapid declines, I don't have that information, but this action obviously wasn't typical. So it's been quite the relief rally, and perhaps it will be a lot more than that, but it's too early to say.
Looking at the three TSP stock fund indices, they all have one thing in common; they are all testing their 50-day moving averages right now. We've seen bear market rallies fail near this level in the past, but we also saw some explosive moves through this level when the bulls took charge, so where it goes from here in the short-term may say a lot about the intermediate-term.
$SPX is the C-fund, $DWCPF is the S-fund, and EFA is the I-fund...
The market moving back to the July highs is certainly a possibility, but if you recall, it was the Magnificent 7 stocks running on all cylinders back then based on a perfect AI investment environment, and since then most of them reported some possible slowdowns in the coming quarter, so why would we they move to new highs again so quickly? Nvidia reports earnings on August 28 so maybe that will change the dynamic, but until then, what's the catalyst for new highs?
The Weekly Jobless clams come in again today and estimates are looking for a 232K new claims vs. last week's 233K. We will also get the Retail Sales figures for July, plus Wal-Mart reports today and their take on the economy often sways market sentiment. It could be an interesting day.
Nobody likes getting their inboxes stuffed with useless email, including me, but there are a few that I use daily to remind me to check out each day. My link to sentmentrader.com's daily updates is one of the must reads for me, as is the link to the daily woot.com item (it used to be better before Amazon took it over.) We would hope that a daily or weekly reminder would be of interest to you, whether that is to check out our market commentaries, read the latest forum posts, view the updated TSP share prices and returns, check the TSP Talk AutoTracker standings and latest IFTs, or even take part in the weekly TSP Talk market sentiment survey. If so, please check out how to be added to one or more of our lists. You can unsubscribe or change your list preferences at any time. We don't spam you or sell information, or anything like that. We just want to keep you engaged with TSP Talk. Thanks!
The S&P 500 (C-fund) is back up testing its 50-day moving average, and you can see -- sometimes it holds as support and resistance, and sometimes it doesn't. But the trend is basically knowing if a chart is above or below the 50 and 200 day averages. It closed 0.07 above that 50-day EMA yesterday.
The PMO indicator is also curling up where we have seen it hold before. However, it doesn't always hold. This is still technically a bull market so it it does curl up and the index breaks above the 50-day moving average, it would be tough to deny the strength.
The DWCPF (S-fund) has done well but it is having a little more trouble than the S&P 500 in that the open gap from August 2nd is still very open, while the one on the S&P has closed already, and it is below a couple of resistance levels including that 50-day average.
The EFA (I-fund) did fill its open gap from August 2nd with a little help from a pullback in the dollar, but as mentioned above, it is also dealing with that key 50-day EMA.
BND (F-fund) continues to climb after its recent pullback and successful test of the old breakout resistance line.
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
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.
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Yesterday's action was OK. Maybe it was a needed stall for the broader indices before another move toward the recent highs, or maybe it was plain fatigue before the indices rollover. It's tough to say, but we did have some decent data yesterday, however it's just a repeat of what we have been seeing for a couple of weeks. We all know inflation has gotten better. Maybe a little sticky on the Core CPI data yesterday, but certainly not troublesome.
The Nasdaq lagged yesterday as there were mixed results from the Magnificent 7 stocks, but more broadly it was on the negative side. We also saw a lot more new 52-week lows than highs, and that's interesting because the Nasdaq Composite is about 4000 points higher than it was a year ago, so once again big tech has done most of the lifting here.
Apparently the move in the VIX (Volatility Index) from a close above 35 last Monday, to the close below 17 yesterday, was the fastest decline in history. What happened after those prior rapid declines, I don't have that information, but this action obviously wasn't typical. So it's been quite the relief rally, and perhaps it will be a lot more than that, but it's too early to say.
Looking at the three TSP stock fund indices, they all have one thing in common; they are all testing their 50-day moving averages right now. We've seen bear market rallies fail near this level in the past, but we also saw some explosive moves through this level when the bulls took charge, so where it goes from here in the short-term may say a lot about the intermediate-term.
$SPX is the C-fund, $DWCPF is the S-fund, and EFA is the I-fund...
The market moving back to the July highs is certainly a possibility, but if you recall, it was the Magnificent 7 stocks running on all cylinders back then based on a perfect AI investment environment, and since then most of them reported some possible slowdowns in the coming quarter, so why would we they move to new highs again so quickly? Nvidia reports earnings on August 28 so maybe that will change the dynamic, but until then, what's the catalyst for new highs?
The Weekly Jobless clams come in again today and estimates are looking for a 232K new claims vs. last week's 233K. We will also get the Retail Sales figures for July, plus Wal-Mart reports today and their take on the economy often sways market sentiment. It could be an interesting day.
Nobody likes getting their inboxes stuffed with useless email, including me, but there are a few that I use daily to remind me to check out each day. My link to sentmentrader.com's daily updates is one of the must reads for me, as is the link to the daily woot.com item (it used to be better before Amazon took it over.) We would hope that a daily or weekly reminder would be of interest to you, whether that is to check out our market commentaries, read the latest forum posts, view the updated TSP share prices and returns, check the TSP Talk AutoTracker standings and latest IFTs, or even take part in the weekly TSP Talk market sentiment survey. If so, please check out how to be added to one or more of our lists. You can unsubscribe or change your list preferences at any time. We don't spam you or sell information, or anything like that. We just want to keep you engaged with TSP Talk. Thanks!
The S&P 500 (C-fund) is back up testing its 50-day moving average, and you can see -- sometimes it holds as support and resistance, and sometimes it doesn't. But the trend is basically knowing if a chart is above or below the 50 and 200 day averages. It closed 0.07 above that 50-day EMA yesterday.
The PMO indicator is also curling up where we have seen it hold before. However, it doesn't always hold. This is still technically a bull market so it it does curl up and the index breaks above the 50-day moving average, it would be tough to deny the strength.
The DWCPF (S-fund) has done well but it is having a little more trouble than the S&P 500 in that the open gap from August 2nd is still very open, while the one on the S&P has closed already, and it is below a couple of resistance levels including that 50-day average.
The EFA (I-fund) did fill its open gap from August 2nd with a little help from a pullback in the dollar, but as mentioned above, it is also dealing with that key 50-day EMA.
BND (F-fund) continues to climb after its recent pullback and successful test of the old breakout resistance line.
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
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.
