Stocks ended a wild August with a bit of a whimper as we saw slight to modest losses across the board. However it was a very successful month for the stock market after mostly negative expectations because of seasonality issues. Instead the S&P 500 cemented in its 7th straight positive month. The Dow lost 39-points on the day. Bonds were down, reversing some early losses, and the dollar was flat after an initial breakdown.
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Again I apologize for making today's commentary brief. I had a medical emergency in the family and had to take care of that all day yesterday, and for the next couple of days. Nothing too major - just some broken bones that had to be screwed back in place. Thanks for understanding, and for your patience.
Just to keep us guessing, the internals were quite positive yesterday despite the pervasive red numbers in the indices.
The dollar ended the day flat so it didn't really help or hurt anything, but the chart did breakdown early on, found support at the 50-day EMA, and even though the UUP closed flat, it still closed below the rising support line.
Here is the September seasonality chart. The August chart probably hurt me more than it helped since it is historically a weaker than average month, and rather than being aggressive with the buy signals we had in the latter part of the month, I kept some cash on hand for safety. Not good. September is in the same situation where expectations are low because it has the lowest average return (-0.65%) of any month over the last 30 years.
Chart provided courtesy of www.sentimentrader.com
This was tweeted by Carter Braxton Worth and reposted in our forum by Robo.
"For the month of August we've made 10 new intraday, all-time highs in the $SPX... this hasn't happened in the month of August since 1987. The record number of intraday, all-time highs in the month of August is 11... which happened in 1929."
I probably don't have to remind you about what happened to the stock market in October of both 1987 and 1929.
Stop the presses! The S&P 500 (C-fund) didn't make a new high yesterday. Instead we saw a small dip back after two consecutive good sized rallies. The low yesterday held at the old resistance line, so that is something to keep an eye on. It's a new month so we tend to see new money come into the market, and that usually means a bullish bias on the first couple of trading days, but September gets a little squirrely after day one.
The DWCPF (S-fund) backed off for a second day but it still closed at its third highest close ever yesterday. The other two being last Friday and then back in late June, so this chart has been consolidating nicely.
The EFA (EAFE Index / I-fund) posted a negative outside reversal day, and with what could be a bearish looking rising wedge formation formed, and the dollar trying to hold at the 50-day EMA, this fund could be a little vulnerable to start September.
The Dow Transportation Index fell more than 1% and is now back below the 50-day moving average, and trying to hold the 100-day EMA.
The BND (bonds / F-fund) pulled back after an early rally up to the resistance lines we drew in yesterday. So the top of the trading channel is back in play, and on the downside it looks like the 50-day EMA is the support area.
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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Again I apologize for making today's commentary brief. I had a medical emergency in the family and had to take care of that all day yesterday, and for the next couple of days. Nothing too major - just some broken bones that had to be screwed back in place. Thanks for understanding, and for your patience.
Just to keep us guessing, the internals were quite positive yesterday despite the pervasive red numbers in the indices.
The dollar ended the day flat so it didn't really help or hurt anything, but the chart did breakdown early on, found support at the 50-day EMA, and even though the UUP closed flat, it still closed below the rising support line.
Here is the September seasonality chart. The August chart probably hurt me more than it helped since it is historically a weaker than average month, and rather than being aggressive with the buy signals we had in the latter part of the month, I kept some cash on hand for safety. Not good. September is in the same situation where expectations are low because it has the lowest average return (-0.65%) of any month over the last 30 years.
Chart provided courtesy of www.sentimentrader.com
This was tweeted by Carter Braxton Worth and reposted in our forum by Robo.
"For the month of August we've made 10 new intraday, all-time highs in the $SPX... this hasn't happened in the month of August since 1987. The record number of intraday, all-time highs in the month of August is 11... which happened in 1929."
I probably don't have to remind you about what happened to the stock market in October of both 1987 and 1929.
Stop the presses! The S&P 500 (C-fund) didn't make a new high yesterday. Instead we saw a small dip back after two consecutive good sized rallies. The low yesterday held at the old resistance line, so that is something to keep an eye on. It's a new month so we tend to see new money come into the market, and that usually means a bullish bias on the first couple of trading days, but September gets a little squirrely after day one.
The DWCPF (S-fund) backed off for a second day but it still closed at its third highest close ever yesterday. The other two being last Friday and then back in late June, so this chart has been consolidating nicely.
The EFA (EAFE Index / I-fund) posted a negative outside reversal day, and with what could be a bearish looking rising wedge formation formed, and the dollar trying to hold at the 50-day EMA, this fund could be a little vulnerable to start September.
The Dow Transportation Index fell more than 1% and is now back below the 50-day moving average, and trying to hold the 100-day EMA.
The BND (bonds / F-fund) pulled back after an early rally up to the resistance lines we drew in yesterday. So the top of the trading channel is back in play, and on the downside it looks like the 50-day EMA is the support area.
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.
