Stocks were very flat yesterday on a very quiet, light volume trading day despite Moody's cutting its outlook on the US economy. That's good news for anyone who may have skipped making an IFT on Friday because of the vague information we had regarding whether the TSP was closed and / or processing transactions. The Dow gained 55-points while the C, S, I and F-funds were up or down just minor amounts, although the I-fund had a decent gain.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[/TD]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
A little follow up to Friday's mix up with the TSP and whether they were processing transactions. After initially telling me that the TSP would be closed on Friday, I had someone actually call me on Monday - after I emailed them again trying to get an answer - and they confirmed that the TSP was processing transactions. They said, because the holiday fell on a Saturday and Friday was only the observed holiday, that they did process transactions. We've had plenty of holidays fall on weekends and they didn't do this, so I don't know what they were thinking.
Anyway, because the market was quite flat yesterday, the funds didn't move much so it wasn't a major factor in our returns if you missed making a transfer because we thought it was closed.
Stocks did open lower on Monday after a weekend that saw Moody's cut its outlook for the US economy. Ironically, Moody’s is the only one of the big-three agencies that still has a triple-A rating on U.S. debt. The market took it pretty well fighting off that news which was said to be because of the “very large” fiscal deficits and partisan gridlock in Washington.
Speaking of that, we could get some grumblings from investors the closer we get to Friday's budget deadline, but for the most part the market hasn't worried too much about these deadlines as they are likely to kick the can down the road again because compromise has become a bad word in Washington -- for better or worse.
In early trading yesterday, a spike up in yields and the dollar triggered the weak open for equities, but as the day wore on, everything reversed course and ended the day closer to flat. It was a very quiet day of trading as volume dried up in front of this morning's CPI report. The recent inflationary reports have been coming in very close to the expectations so they haven't been market moving events, but any surprises could change that.
The Yield on the 10-year Treasury Yield moved up to tag the bottom of its overhead open gap, but reversed down before entering the gap.
The dollar also has an open gap overhead, but the bear flag in blue may be indicating a breakdown is coming. It could go either way because the angle of the bear flag might be considered more of a "V" shape bottom rather than a flatter flag formation. The 50-day EMA is trying to hold both charts up at the moment.
There's a battle going on between some questionable fundamentals with a setup for a potential recession in 2024, and a market that is heading into the stronger months of the year historically, after had gotten oversold during a 3-month correction in August, September, and October. So, seasonality, new upward momentum, and improved chart formations will be fighting the bear's pessimistic outlook for the economy.
Buy and holders are going to buy and hold, but as a market timer, I feel we need to stay nimble as the momentum can shift in this market that has been trading in a wide range, for a long time, and that can set up trading opportunities, if we can play them right, which is easier said than done.
The S&P 500 (C-fund) flirted with that descending resistance line again, but failed to break through. The Nasdaq chart (not shown) did break through its resistance last week, but other market leaders like the small caps and Transportation Index are still floundering below their resistance. There are two major open gaps below still on this chart and that makes those levels potential downside targets, so it's hard to get comfortable with the upside. Trading volume was light and that usually favors the bulls. This isn't a bad looking chart unless it flips over at these resistance areas.
DWCPF (S-fund) is holding below some resistance and in the process it may be forming a bull flag. Perhaps today's CPI report will trigger a breakout, but with that open gap down near 1615, we may need a flush out on the downside first to get that out of the way.
The EFA (I-fund) led the way yesterday and it too has a decent looking bull flag, although it is also below stubborn resistance. There's a lot to be optimistic about here but it probably has to breakout above 70 before new buyers will follow on the upside.
BND (bonds / F-fund) was flat after it found support at the 50-day EMA and yields reversed down. It's trying to form a bottom, but we can't say it has yet.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
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.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
A little follow up to Friday's mix up with the TSP and whether they were processing transactions. After initially telling me that the TSP would be closed on Friday, I had someone actually call me on Monday - after I emailed them again trying to get an answer - and they confirmed that the TSP was processing transactions. They said, because the holiday fell on a Saturday and Friday was only the observed holiday, that they did process transactions. We've had plenty of holidays fall on weekends and they didn't do this, so I don't know what they were thinking.
Anyway, because the market was quite flat yesterday, the funds didn't move much so it wasn't a major factor in our returns if you missed making a transfer because we thought it was closed.
Stocks did open lower on Monday after a weekend that saw Moody's cut its outlook for the US economy. Ironically, Moody’s is the only one of the big-three agencies that still has a triple-A rating on U.S. debt. The market took it pretty well fighting off that news which was said to be because of the “very large” fiscal deficits and partisan gridlock in Washington.
Speaking of that, we could get some grumblings from investors the closer we get to Friday's budget deadline, but for the most part the market hasn't worried too much about these deadlines as they are likely to kick the can down the road again because compromise has become a bad word in Washington -- for better or worse.
In early trading yesterday, a spike up in yields and the dollar triggered the weak open for equities, but as the day wore on, everything reversed course and ended the day closer to flat. It was a very quiet day of trading as volume dried up in front of this morning's CPI report. The recent inflationary reports have been coming in very close to the expectations so they haven't been market moving events, but any surprises could change that.
The Yield on the 10-year Treasury Yield moved up to tag the bottom of its overhead open gap, but reversed down before entering the gap.
The dollar also has an open gap overhead, but the bear flag in blue may be indicating a breakdown is coming. It could go either way because the angle of the bear flag might be considered more of a "V" shape bottom rather than a flatter flag formation. The 50-day EMA is trying to hold both charts up at the moment.
There's a battle going on between some questionable fundamentals with a setup for a potential recession in 2024, and a market that is heading into the stronger months of the year historically, after had gotten oversold during a 3-month correction in August, September, and October. So, seasonality, new upward momentum, and improved chart formations will be fighting the bear's pessimistic outlook for the economy.
Buy and holders are going to buy and hold, but as a market timer, I feel we need to stay nimble as the momentum can shift in this market that has been trading in a wide range, for a long time, and that can set up trading opportunities, if we can play them right, which is easier said than done.
The S&P 500 (C-fund) flirted with that descending resistance line again, but failed to break through. The Nasdaq chart (not shown) did break through its resistance last week, but other market leaders like the small caps and Transportation Index are still floundering below their resistance. There are two major open gaps below still on this chart and that makes those levels potential downside targets, so it's hard to get comfortable with the upside. Trading volume was light and that usually favors the bulls. This isn't a bad looking chart unless it flips over at these resistance areas.
DWCPF (S-fund) is holding below some resistance and in the process it may be forming a bull flag. Perhaps today's CPI report will trigger a breakout, but with that open gap down near 1615, we may need a flush out on the downside first to get that out of the way.
The EFA (I-fund) led the way yesterday and it too has a decent looking bull flag, although it is also below stubborn resistance. There's a lot to be optimistic about here but it probably has to breakout above 70 before new buyers will follow on the upside.
BND (bonds / F-fund) was flat after it found support at the 50-day EMA and yields reversed down. It's trying to form a bottom, but we can't say it has yet.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
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.
