Despite a small loss in the Dow, stocks were quite strong on Friday, and the S&P 500 was up four out of five days last week triggered by big name earnings reports. Friday's initial catalyst for the rally was earnings from Amazon, while a big jobs report may have been too hot for the market. The one down day last week was a doozy when the S&P lost 112-points after Meta (Facebook) reported. The jobs report sent yields higher on Friday, so the volatility continued and we come into the new week.
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The S&P 500 (C-fund) posted a nice gain on Friday on the backs of Amazon's earnings and a strong jobs report, but the chart is still in a little trouble as the relief rally stalled at some key resistance last week. There are reasons to believe that the downside could be over done, but that is only if we assume that the bull market is still intact. There can be an argument made that the bull is running out of steam and a potential bear market is starting to manifest. It's tough to say right here, right now, but I think we'll have a better idea by the end of the week.
The DWCPF (small caps / S-fund) rallied on Friday but it too is up against a confluence of resistance just below 2000.
The EFA was up 0.24% and the dollar was down on the day, so why the I-fund was given a loss on the day doesn't make too much sense, but as I mentioned above, that's the nature of the I-fund, the overnight / overseas trading, and the fair valuations they use to determine the daily prices. They will likely adjust accordingly, but trying to time this can be tough.
BND (Bonds / F-fund) got slammed again and we can see here what bear market action looks like. This happens to be in the bond fund, while stocks are still trying to hang onto their bull market status.
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
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Thanks for reading. We'll see you back here tomorrow.
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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The jobs report came in with a gain of 467,000 jobs, blowing out expectations, and with some estimates as low as a loss of 400,000 jobs, the market was once again a little concerned about inflation, and less concerned about a weakening economy as the yield on the 10-year Treasury Note broke out of its bull flag to close over 1.9%. This could be a concern for the tech and growth sector in the coming week.
Amazon, one of the darlings of the Nasdaq and S&P 500, jumped 13.5% on Friday, but it is not in the Dow so the Dow did not benefit directly from Amazon's gain and was down on the day. Without Amazon the results in the indices would have looked completely different, so with the chart closing below some key resistance, this week is already shaping up to be a tester.
The dollar was down for a 6th straight day, filling an open gap on Thursday, and opening multiple overhead gaps. This should have, but didn't help the I-fund much as that fund closed with a small loss. I was in the I-fund for a while this year and to tell you the truth, I got a little tired of the way it gets priced - always having to deal with those fair value adjustments. I know some of you are concerned about that as well as it is one of the most frequently asked questions from newer folks starting to manage their own accounts.
The Dow Transportation Index is a market leader and it failed to rally with the rest of the market yon Friday, and it also remains below some heavy resistance, although the 200-day average did help by holding up as support so far.
The reason for the weakness in the Transports could have something to do with the skyrocketing price of oil, which closed above $92 a barrel on Friday. Airline stocks and ETFs pulled back late last week after oil hit $90.
The top weighted stocks in the S&P 500 have now all reported (top 7 are below) so perhaps the wild back and forth swings at the open will let up a bit, but with the VIX above 23, the volatility in general could continue.
Amazon, one of the darlings of the Nasdaq and S&P 500, jumped 13.5% on Friday, but it is not in the Dow so the Dow did not benefit directly from Amazon's gain and was down on the day. Without Amazon the results in the indices would have looked completely different, so with the chart closing below some key resistance, this week is already shaping up to be a tester.
The dollar was down for a 6th straight day, filling an open gap on Thursday, and opening multiple overhead gaps. This should have, but didn't help the I-fund much as that fund closed with a small loss. I was in the I-fund for a while this year and to tell you the truth, I got a little tired of the way it gets priced - always having to deal with those fair value adjustments. I know some of you are concerned about that as well as it is one of the most frequently asked questions from newer folks starting to manage their own accounts.
The Dow Transportation Index is a market leader and it failed to rally with the rest of the market yon Friday, and it also remains below some heavy resistance, although the 200-day average did help by holding up as support so far.
The reason for the weakness in the Transports could have something to do with the skyrocketing price of oil, which closed above $92 a barrel on Friday. Airline stocks and ETFs pulled back late last week after oil hit $90.
The top weighted stocks in the S&P 500 have now all reported (top 7 are below) so perhaps the wild back and forth swings at the open will let up a bit, but with the VIX above 23, the volatility in general could continue.
The S&P 500 (C-fund) posted a nice gain on Friday on the backs of Amazon's earnings and a strong jobs report, but the chart is still in a little trouble as the relief rally stalled at some key resistance last week. There are reasons to believe that the downside could be over done, but that is only if we assume that the bull market is still intact. There can be an argument made that the bull is running out of steam and a potential bear market is starting to manifest. It's tough to say right here, right now, but I think we'll have a better idea by the end of the week.
The DWCPF (small caps / S-fund) rallied on Friday but it too is up against a confluence of resistance just below 2000.
The EFA was up 0.24% and the dollar was down on the day, so why the I-fund was given a loss on the day doesn't make too much sense, but as I mentioned above, that's the nature of the I-fund, the overnight / overseas trading, and the fair valuations they use to determine the daily prices. They will likely adjust accordingly, but trying to time this can be tough.
BND (Bonds / F-fund) got slammed again and we can see here what bear market action looks like. This happens to be in the bond fund, while stocks are still trying to hang onto their bull market status.
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
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks for reading. We'll see you back here tomorrow.
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.
