A late push lower sent the major stock indices to slight to modest losses after the Fed's release of their policy statement sent them to new highs earlier in the day. The Dow ended the day down 165-points, or 0.48%, which was the worst of the bunch, while the S&P (C-fund) and small caps (S-fund) were down just slightly.
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The Fed didn't change anything yesterday but they continue to give the market comfort in the form of low, low interest rates, and easy money as they also said it's not yet time to start tapering their easing of monetary policy.
Biden was expected to announced yet another $4 trillion dollars in spending plans on Wednesday evening with the American Jobs Plan and the American Family Plan. The dollar got pounded again on this news.
Maybe think new money may be coming in the nick of time because I think we found out what everyone was doing with their prior stimulus checks, and it wasn't buying food, shelter, and healthcare. They bought Apple products. Apple reported a blowout earnings report on record sales of almost everything after the bell yesterday.
Facebook also had a good report and jumped in after hours trading.
Despite strong earnings, Ford was down after hours because they guided lower for their next quarter earnings because they expect to lose 50% of their production due to difficulties in getting parts they need, in particular semiconductors. They currently have 22,000 vehicles sitting waiting for these chips, and they expect the production to be off by 1.1 million vehicles because of it.
I wonder how many other companies are in this situation?
The 10-year Treasury yields popped up early but reversed down to close slightly lower on the day. In the process it did move above the descending resistance line after holding at the 50-day EMA, so my guess is it will make its way back up to the prior highs in the coming weeks. That would be bad news for the F-fund, should that happen.
Because of the strong earnings after the bell we did see some buying in the futures market so that could roll into Thursday's opening bell. However, the S&P 500 has been dragging in that 4200 for days despite strong earnings, so perhaps a sell the news reaction is being set up?
The S&P 500 (C-fund) poked above all of the resistance lines momentarily on Wednesday after the FOMC meeting. But it peaked and pulled back, creating another negative reversal day on the charts. Not they they have meant much in recent months, but typically it is the sign of a reversal in the chart. We'll see. The earnings reports after the bell yesterday pushed the futures higher, but will they hold into today's opening bell under these technical conditions? If not, that could be a sign of fatigue and the start of a rest period for stocks. If they do continue higher, we can probably expect more of the same.
The DWCPF (S-fund) was down slightly yesterday but it has now closed above the March high for three straight days. It remains below the February high and it looks like the fate of the S-fund will depend on which one of these two lines holds and which gets broken.
The EFA (I-fund) benefited from the drop in the dollar yesterday, holding onto gains - something that the U.S. indices couldn't do.
The Nasdaq 100 large tech index was down moderately yesterday. Everything is pointing to a breakout to new highs after Apple and Facebook's strong earnings followed Google and Microsoft's the prior day. We have a bull flag here that may have had one failed breakout already. If this falls back below 13,900 it would not be good, with all of that positive news coming out. It's breakout time or bust here.
BND (F-fund) sold off early on Wednesday when yields were rallying, but both reversed and this came closer to break even after successfully testing the lower end of the trading channel. That was a positive reversal day but it now finds itself back below the 50-day EMA after Tuesday's breakdown.
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.
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The Fed didn't change anything yesterday but they continue to give the market comfort in the form of low, low interest rates, and easy money as they also said it's not yet time to start tapering their easing of monetary policy.
Biden was expected to announced yet another $4 trillion dollars in spending plans on Wednesday evening with the American Jobs Plan and the American Family Plan. The dollar got pounded again on this news.
Maybe think new money may be coming in the nick of time because I think we found out what everyone was doing with their prior stimulus checks, and it wasn't buying food, shelter, and healthcare. They bought Apple products. Apple reported a blowout earnings report on record sales of almost everything after the bell yesterday.
Facebook also had a good report and jumped in after hours trading.
Despite strong earnings, Ford was down after hours because they guided lower for their next quarter earnings because they expect to lose 50% of their production due to difficulties in getting parts they need, in particular semiconductors. They currently have 22,000 vehicles sitting waiting for these chips, and they expect the production to be off by 1.1 million vehicles because of it.
I wonder how many other companies are in this situation?
The 10-year Treasury yields popped up early but reversed down to close slightly lower on the day. In the process it did move above the descending resistance line after holding at the 50-day EMA, so my guess is it will make its way back up to the prior highs in the coming weeks. That would be bad news for the F-fund, should that happen.
Because of the strong earnings after the bell we did see some buying in the futures market so that could roll into Thursday's opening bell. However, the S&P 500 has been dragging in that 4200 for days despite strong earnings, so perhaps a sell the news reaction is being set up?
The S&P 500 (C-fund) poked above all of the resistance lines momentarily on Wednesday after the FOMC meeting. But it peaked and pulled back, creating another negative reversal day on the charts. Not they they have meant much in recent months, but typically it is the sign of a reversal in the chart. We'll see. The earnings reports after the bell yesterday pushed the futures higher, but will they hold into today's opening bell under these technical conditions? If not, that could be a sign of fatigue and the start of a rest period for stocks. If they do continue higher, we can probably expect more of the same.
The DWCPF (S-fund) was down slightly yesterday but it has now closed above the March high for three straight days. It remains below the February high and it looks like the fate of the S-fund will depend on which one of these two lines holds and which gets broken.
The EFA (I-fund) benefited from the drop in the dollar yesterday, holding onto gains - something that the U.S. indices couldn't do.
The Nasdaq 100 large tech index was down moderately yesterday. Everything is pointing to a breakout to new highs after Apple and Facebook's strong earnings followed Google and Microsoft's the prior day. We have a bull flag here that may have had one failed breakout already. If this falls back below 13,900 it would not be good, with all of that positive news coming out. It's breakout time or bust here.
BND (F-fund) sold off early on Wednesday when yields were rallying, but both reversed and this came closer to break even after successfully testing the lower end of the trading channel. That was a positive reversal day but it now finds itself back below the 50-day EMA after Tuesday's breakdown.
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.
