Thursday was a very strong day for stocks as the indices gapped up at the open and never looked back. It was one the best, if not the best, days in 2023 for some of the indices, and that is usually the case when you get a snap back rally after a long weak period. The Dow gained 565-points, and we saw gains near or above 2% in many of the broader indices. Small caps led as the Russell 2000 gained 2.7% while the S-fund jumped an impressive 2.4%.
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The big news after the bell yesterday was the release of Apple's earnings, which were fine, but guidance wasn't impressive and the stock was trading down a few points after hours. There was an open gap near 173.50 so it may need to test that. This may pause the rally, or possibly kill it, although we just have to see if investors, who may have missed the recent rally, will be buying the dips quickly or not.
We'll get the October jobs report before the opening bell this morning and estimates are looking for a gain of about 175,000 jobs. The unemployment rate is expected to be 3.8%. I don't know how meaningful this report will be with the FOMC meeting already behind us and the market bouncing on lower yields, but if the report does move yields up significantly again, who knows - it could be a show stopper for the relief rally.
The 10-year Treasury Yield gapped lower so we have seen a swift move down from 5% to below 4.7% and that has eased tensions from investors for now with it falling below some support yesterday, but it is still above its 50-day EMA and if that 4.6% area does hold, we may see some profit taking in stocks. The decline in the dollar also helped stocks, and the I-fund which gained about 2% yesterday as well.
The late October / early November seasonality has been a positive catalyst, and will be a bullish bias for a while longer, but seasonality doesn't create 2% moves. It's just helping.
Chart provided courtesy of www.sentimentrader.com
I won't get too deep in dissecting charts since most look the same as you will see down below in the TSP fund chart section. The recent rally pushed many of them off the lows; some moved back above key moving averages, but of the downtrends are still intact and there's more work to be done before we can say the bottom is in. It's certainly a better situation, but it could turn again, and if Apple isn't going to run with the bulls, the bears may see that as an opportunity.
One chart to show as an example is the market leading Dow Transportation Index. Like many charts, it bounced mightily off its recent lows, but yesterday it stalled and backed off at the 20-day EMA - something that has been holding it down for the most part, since the breakdown in early August.
This is a big test and it may just be a temporary pause at resistance so, after the reaction to Apple's report, and this mornings jobs report, we'll get more of clue whether it's a pause or a lower high peak for this leader.
Admin Note: One more time - I want to give a shout out to the October AutoTracker leaders / winners. It was a bad month for stocks, but the leaders did some fancy footwork trading and all ended the month on a positive note, with Beau435 leading the way with an impressive 3.09% gain in October. The top 5 returns receive Amazon gift cards.
Want to join the AutoTracker? It's free! How to Create an Account
And, or, follow the leaders with a subscription to: The Last Look Report
The S&P 500 (C-fund) ran up to the 50-day EMA, where sometimes relief rallies go to die, so today and early next week could be very important. Will dip buyers step in or will we see a wave of profit taking after the nice gains this week? Once again we have a PMO indicator crossover and as I have mentioned before, these can sometimes be indications of being overbought and can temporarily stall a rally. The prior two crossovers were serious stalls, but we could also get a slight pullback with a resumption of the upside. You never know, but a little selling either way would not be a surprise. What would surprise me is if the bulls immediately ran through this stop sign and continued to move higher without a pause. That would be impressive, although maybe dangerous as support gets built on the ups and downs of a new trend.
I highlighted the DWCPF (S-fund) yesterday and noted all the room it had overhead. BUT, it had to hold the lows otherwise support would be all but gone. This is a good start and there are other upside targets like the 50-day EMA, if Apple and the jobs report don't kill the mood.
The EFA (I-fund) pushed above one resistance line and its 50-day EMA yesterday, and nearly made it up to the top of the trading channel yesterday. Again, this is where it could get tougher as bear market rallies could stall in this area. So, whether this is a bear market rally or something more, could be determined in the next few trading days. The dollar was down yesterday, but certainly not out as we showed in the UUP chart up above.
BND (bonds / F-fund) rallied big for a second straight day as yields plummeted at the prospects of the Fed being done with rate cuts, and perhaps bracing for a possible economic slow down. It is above its trading channel now and this is looking a lot better than it did a week ago.
Thanks so much for reading! Have a great weekend!
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.
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The big news after the bell yesterday was the release of Apple's earnings, which were fine, but guidance wasn't impressive and the stock was trading down a few points after hours. There was an open gap near 173.50 so it may need to test that. This may pause the rally, or possibly kill it, although we just have to see if investors, who may have missed the recent rally, will be buying the dips quickly or not.
We'll get the October jobs report before the opening bell this morning and estimates are looking for a gain of about 175,000 jobs. The unemployment rate is expected to be 3.8%. I don't know how meaningful this report will be with the FOMC meeting already behind us and the market bouncing on lower yields, but if the report does move yields up significantly again, who knows - it could be a show stopper for the relief rally.
The 10-year Treasury Yield gapped lower so we have seen a swift move down from 5% to below 4.7% and that has eased tensions from investors for now with it falling below some support yesterday, but it is still above its 50-day EMA and if that 4.6% area does hold, we may see some profit taking in stocks. The decline in the dollar also helped stocks, and the I-fund which gained about 2% yesterday as well.
The late October / early November seasonality has been a positive catalyst, and will be a bullish bias for a while longer, but seasonality doesn't create 2% moves. It's just helping.
Chart provided courtesy of www.sentimentrader.com
I won't get too deep in dissecting charts since most look the same as you will see down below in the TSP fund chart section. The recent rally pushed many of them off the lows; some moved back above key moving averages, but of the downtrends are still intact and there's more work to be done before we can say the bottom is in. It's certainly a better situation, but it could turn again, and if Apple isn't going to run with the bulls, the bears may see that as an opportunity.
One chart to show as an example is the market leading Dow Transportation Index. Like many charts, it bounced mightily off its recent lows, but yesterday it stalled and backed off at the 20-day EMA - something that has been holding it down for the most part, since the breakdown in early August.
This is a big test and it may just be a temporary pause at resistance so, after the reaction to Apple's report, and this mornings jobs report, we'll get more of clue whether it's a pause or a lower high peak for this leader.
Admin Note: One more time - I want to give a shout out to the October AutoTracker leaders / winners. It was a bad month for stocks, but the leaders did some fancy footwork trading and all ended the month on a positive note, with Beau435 leading the way with an impressive 3.09% gain in October. The top 5 returns receive Amazon gift cards.
Want to join the AutoTracker? It's free! How to Create an Account
And, or, follow the leaders with a subscription to: The Last Look Report
The S&P 500 (C-fund) ran up to the 50-day EMA, where sometimes relief rallies go to die, so today and early next week could be very important. Will dip buyers step in or will we see a wave of profit taking after the nice gains this week? Once again we have a PMO indicator crossover and as I have mentioned before, these can sometimes be indications of being overbought and can temporarily stall a rally. The prior two crossovers were serious stalls, but we could also get a slight pullback with a resumption of the upside. You never know, but a little selling either way would not be a surprise. What would surprise me is if the bulls immediately ran through this stop sign and continued to move higher without a pause. That would be impressive, although maybe dangerous as support gets built on the ups and downs of a new trend.
I highlighted the DWCPF (S-fund) yesterday and noted all the room it had overhead. BUT, it had to hold the lows otherwise support would be all but gone. This is a good start and there are other upside targets like the 50-day EMA, if Apple and the jobs report don't kill the mood.
The EFA (I-fund) pushed above one resistance line and its 50-day EMA yesterday, and nearly made it up to the top of the trading channel yesterday. Again, this is where it could get tougher as bear market rallies could stall in this area. So, whether this is a bear market rally or something more, could be determined in the next few trading days. The dollar was down yesterday, but certainly not out as we showed in the UUP chart up above.
BND (bonds / F-fund) rallied big for a second straight day as yields plummeted at the prospects of the Fed being done with rate cuts, and perhaps bracing for a possible economic slow down. It is above its trading channel now and this is looking a lot better than it did a week ago.
Thanks so much for reading! Have a great weekend!
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.
