The stock market loves to fool investors (or market timers) as much as possible, so just as we all got used to strong openings followed by late sell offs, the market threw us a curve on Wednesday and gave us a strong open and a stronger close. The Dow gained an impressive 478-points, and while it was a fairly broad rally, it took that late push higher to move the Nasdaq into positive territory. Small caps led and all three TSP stock funds closed at a new high for the year. Bonds rallied as yields pulled back.
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Not that it was a big deal, but big tech was lagging yesterday but you can see the strength of that late rally in the Nasdaq in the final hour pulled everything up with it - just as everyone was preparing for the next late sell off as we had seen over the last few trading days.
This is a holiday shortened week for the stock and bond markets and the exchanges will be closed on Friday for Good Friday. Despite the market being closed, the PCE Prices report will be released on Friday morning, so we won't see how the markets react until Monday.
The 10-year Treasury Yield was down on Wednesday and this time it closed below the 50-day EMA. As the right shoulder of the inverted head and shoulders pattern forms, there may be a couple of levels that need to get retested, including an open "stealth gap" and an old gap being revisited (blue.). Is this setting up a rally in yields after Friday's PCE Prices report?
Today is the final trading day in March and noon ET is the deadline for any March interfund transfer (IFT.) After that you'll be using an April IFT. If you're wondering where to position yourself for April after another strong month, maybe this info will help.
Historically the first few weeks in April have a very bullish bias with 18 of the first 19 days being up (or flat) more often than being down. Only April 11th has been down more often than up going back 30 years.
Chart provided courtesy of www.sentimentrader.com
More recent action also shows that April has done well when the months leading up to it are positive, which was the case in 2019 and 2021. It is also the case this year. The 2022 bear market was an exception year, and otherwise the more choppy years had mixed results.
So history suggests staying bullish in April but I am a little concerned about the 10-year Yield chart above, and the potential PCE Price Report to be more inflationary than we'd like, which would spring that $TNX chart off its recent pullback support levels, and that could send bonds and stocks lower.
The bull market is a live and well and April tends to be a good month for stocks so we probably should be giving the market the benefit of the doubt, but the important inflation report could be a spoiler. Today is the final trading day in the first quarter and it could get interesting in that final hour again - however we want to define interesting (choppy, bearish, bullish?)
From tsp.gov regarding Friday: "Some financial markets will be closed on Friday, March 29, in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (March 29) will be processed Monday night (April 1) at Monday's closing share prices."
Since there will be no trading and the TSP won't process transfers, we will also take the day off and not update our market commentaries, nor post premium reports on Friday.
The S&P 500 (C-fund) was up sharply on Wednesday and the comparison to the move in February continues. If that pattern continues further, it wouldn't be a surprise to see a pullback to the 15-day EMA at some point next week. Although there are some concerns out there including the negative divergence in the PMO indicator, the trend is your friend, and right now the trend is up and pullbacks are getting bought.
DWCPF (S-fund) made a new high for the year yesterday and the chart has been looking good, but a pullback to support is always possible. Do you have a plan in place on how to react if and when that happens?
EFA (I-fund) moved up to the top of that flag pattern yesterday. While it is a bullish flag and the upside could continue for a while, it does have an "F" flag look to it as it slopes up, and those do have a tendency to break down rather than up, and here it is at the top of the flag. However, within that flag it happens to look like a mini cup and handle formation as well, which to tend to break to the upside. So many possibilities.
BND (Bonds / F-fund) broke out from the descending resistance line after yesterday's drop in yields. Friday's PCE report could make this chart look a whole lot different on Monday morning, and I am not making any predictions, but as I said in the top section, the 10-year yield may be nearing support which, if it holds, would put pressure on this chart.
Thanks so much for reading! No commentary on Friday so have a great Easter weekend, and we'll see you on Monday!
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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Not that it was a big deal, but big tech was lagging yesterday but you can see the strength of that late rally in the Nasdaq in the final hour pulled everything up with it - just as everyone was preparing for the next late sell off as we had seen over the last few trading days.
This is a holiday shortened week for the stock and bond markets and the exchanges will be closed on Friday for Good Friday. Despite the market being closed, the PCE Prices report will be released on Friday morning, so we won't see how the markets react until Monday.
The 10-year Treasury Yield was down on Wednesday and this time it closed below the 50-day EMA. As the right shoulder of the inverted head and shoulders pattern forms, there may be a couple of levels that need to get retested, including an open "stealth gap" and an old gap being revisited (blue.). Is this setting up a rally in yields after Friday's PCE Prices report?
Today is the final trading day in March and noon ET is the deadline for any March interfund transfer (IFT.) After that you'll be using an April IFT. If you're wondering where to position yourself for April after another strong month, maybe this info will help.
Historically the first few weeks in April have a very bullish bias with 18 of the first 19 days being up (or flat) more often than being down. Only April 11th has been down more often than up going back 30 years.
Chart provided courtesy of www.sentimentrader.com
More recent action also shows that April has done well when the months leading up to it are positive, which was the case in 2019 and 2021. It is also the case this year. The 2022 bear market was an exception year, and otherwise the more choppy years had mixed results.
So history suggests staying bullish in April but I am a little concerned about the 10-year Yield chart above, and the potential PCE Price Report to be more inflationary than we'd like, which would spring that $TNX chart off its recent pullback support levels, and that could send bonds and stocks lower.
The bull market is a live and well and April tends to be a good month for stocks so we probably should be giving the market the benefit of the doubt, but the important inflation report could be a spoiler. Today is the final trading day in the first quarter and it could get interesting in that final hour again - however we want to define interesting (choppy, bearish, bullish?)
From tsp.gov regarding Friday: "Some financial markets will be closed on Friday, March 29, in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (March 29) will be processed Monday night (April 1) at Monday's closing share prices."
Since there will be no trading and the TSP won't process transfers, we will also take the day off and not update our market commentaries, nor post premium reports on Friday.
The S&P 500 (C-fund) was up sharply on Wednesday and the comparison to the move in February continues. If that pattern continues further, it wouldn't be a surprise to see a pullback to the 15-day EMA at some point next week. Although there are some concerns out there including the negative divergence in the PMO indicator, the trend is your friend, and right now the trend is up and pullbacks are getting bought.
DWCPF (S-fund) made a new high for the year yesterday and the chart has been looking good, but a pullback to support is always possible. Do you have a plan in place on how to react if and when that happens?
EFA (I-fund) moved up to the top of that flag pattern yesterday. While it is a bullish flag and the upside could continue for a while, it does have an "F" flag look to it as it slopes up, and those do have a tendency to break down rather than up, and here it is at the top of the flag. However, within that flag it happens to look like a mini cup and handle formation as well, which to tend to break to the upside. So many possibilities.
BND (Bonds / F-fund) broke out from the descending resistance line after yesterday's drop in yields. Friday's PCE report could make this chart look a whole lot different on Monday morning, and I am not making any predictions, but as I said in the top section, the 10-year yield may be nearing support which, if it holds, would put pressure on this chart.
Thanks so much for reading! No commentary on Friday so have a great Easter weekend, and we'll see you on Monday!
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.
