Stocks rebounded on Thursday after Wednesday's surprise sell off. Point-wise, it was a good day but the rebound wasn't all that impressive as the indices closed well off their earlier highs. The Dow ended the day with a gain of 300-points or 1%. The S&P 500 had a similar gain and the Nasdaq lost a lot of steam in the final couple of hours and gained just 0.50% after closing about 200-points of its high of the day. Bonds were down, as was the dollar.
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That late selling may have had something to do with margin calls as brokerages contact clients toward the end of the trading day who may have losses that took their account below their margin requirements in their accounts, and they are forced to either deposit more money or sell positions, and most tend to choose the latter.
The rally started in the futures market on Thursday morning after the fourth quarter GDP number came out , which was ironically below expectations, so the rally may have been a play on the hopes of more stimulus?
The tremendous trading in those wild stocks that we have probably all heard about by now (i.e. Gamestop, AMC, etc.) has pushed trading volumes higher this week, and because those high flying Gamestop, AMC, Express, etc., were down yesterday, it helped skew the NYSE share volumes. The advance / decline issues looked healthy, especially in the NYSE, but the volumes don't really match that action because of those wild stocks. The Nasdaq share volume ratios were very strong despite the index lagging yesterday.
There were many concerned about the yield on the 10-year Treasury possibly falling below 1% recently, but yesterday there was a pop in yield right at 1%, which was an area of support, although the gap remains open.
The futures reopened on Thursday evening to the downside, but with volatility spiking, you never know where they will end up by the opening bell.
Admin note: I won't be around for most of the day today (Friday) from shortly after the opening bell until into the evening. I normally have to pass on them but this is the only golf tournament that I allow myself to play in all year. So, I will respond to any emails before I leave, but after that I won't be able to get back to you until after the market closes when I will be back to update the AutoTracker. Sorry for any inconvenience, and thanks for your patience.
The S&P 500 (C-fund) had a good news, bad news kind of day as it was up about 1% on the day, and that's nothing to sneeze at. But it lost about half its gains by the close and for a second day in a row it closed below the 20-day EMA and the blue trading channel, so we do have some red flags. It is still way above its 200-day EMA and that's getting more and more concerning. At some point that will pop and the S&P will be drawn into it. The question is whether it will be sooner, or later.
The DWCPF (small caps / S-fund) was lagging most of the day but when the S&P 500 started to rollover, the small caps stabilized a bit and the S-fund actually ended the day with a larger gain than the C-fund and the S&P 500. It also battled back to close just barely above its 20-day EMA again. There is a small open gap just overhead, and we'll have to see if that turns into resistance on any further upside.
The Dow Transportation Index was up 1%, but again the weak close and failure at the support line and 50-day EMA is a little concerning.
The EFA (I-fund) is looking for support in the 73 - 72 area since it started to pullback off the highs from a couple of weeks ago.
The dollar was down and after rallying back for a couple of weeks, so far that 50-day EMA has been too much for it in this bear market it is currently in.
BND (bonds / F-fund) chart is started to get a little complex. We have open gaps above and below the current level, and a nice "V" looking low on the 12th. But that could also be a bear flag (red) if that "V" doesn't start getting more vertical soon. V's tend to go up close to the same angle as they went down. This one isn't doing that.
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
Thanks for reading. Have a great weekend!
Tom Crowley
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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That late selling may have had something to do with margin calls as brokerages contact clients toward the end of the trading day who may have losses that took their account below their margin requirements in their accounts, and they are forced to either deposit more money or sell positions, and most tend to choose the latter.
The rally started in the futures market on Thursday morning after the fourth quarter GDP number came out , which was ironically below expectations, so the rally may have been a play on the hopes of more stimulus?
The tremendous trading in those wild stocks that we have probably all heard about by now (i.e. Gamestop, AMC, etc.) has pushed trading volumes higher this week, and because those high flying Gamestop, AMC, Express, etc., were down yesterday, it helped skew the NYSE share volumes. The advance / decline issues looked healthy, especially in the NYSE, but the volumes don't really match that action because of those wild stocks. The Nasdaq share volume ratios were very strong despite the index lagging yesterday.
There were many concerned about the yield on the 10-year Treasury possibly falling below 1% recently, but yesterday there was a pop in yield right at 1%, which was an area of support, although the gap remains open.
The futures reopened on Thursday evening to the downside, but with volatility spiking, you never know where they will end up by the opening bell.
Admin note: I won't be around for most of the day today (Friday) from shortly after the opening bell until into the evening. I normally have to pass on them but this is the only golf tournament that I allow myself to play in all year. So, I will respond to any emails before I leave, but after that I won't be able to get back to you until after the market closes when I will be back to update the AutoTracker. Sorry for any inconvenience, and thanks for your patience.
The S&P 500 (C-fund) had a good news, bad news kind of day as it was up about 1% on the day, and that's nothing to sneeze at. But it lost about half its gains by the close and for a second day in a row it closed below the 20-day EMA and the blue trading channel, so we do have some red flags. It is still way above its 200-day EMA and that's getting more and more concerning. At some point that will pop and the S&P will be drawn into it. The question is whether it will be sooner, or later.
The DWCPF (small caps / S-fund) was lagging most of the day but when the S&P 500 started to rollover, the small caps stabilized a bit and the S-fund actually ended the day with a larger gain than the C-fund and the S&P 500. It also battled back to close just barely above its 20-day EMA again. There is a small open gap just overhead, and we'll have to see if that turns into resistance on any further upside.
The Dow Transportation Index was up 1%, but again the weak close and failure at the support line and 50-day EMA is a little concerning.
The EFA (I-fund) is looking for support in the 73 - 72 area since it started to pullback off the highs from a couple of weeks ago.
The dollar was down and after rallying back for a couple of weeks, so far that 50-day EMA has been too much for it in this bear market it is currently in.
BND (bonds / F-fund) chart is started to get a little complex. We have open gaps above and below the current level, and a nice "V" looking low on the 12th. But that could also be a bear flag (red) if that "V" doesn't start getting more vertical soon. V's tend to go up close to the same angle as they went down. This one isn't doing that.
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
Thanks for reading. Have a great weekend!
Tom Crowley
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.
