We came into Tuesday morning with modestly higher futures but the selling quickly started after the opening bell. We saw some attempts by the bulls to buy the dip but the selling persisted into the afternoon, although the morning lows held on the S&P 500 and Nasdaq. There seems to be a lot of geopolitical events swirling around and sentiment is getting very bearish again. The question is, is all the bad news priced in yet, because there sure is a lot of it. The Dow fell 173-points and the losses were moderate in the S&P 500 at -0.41%. Small caps lagged despite signs of recent relative strength.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[/TD]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The Russia driven energy war seems to be coming to a head and the stock market is getting a little concerned, just to add to the list of concerns.
The Yield on the 10-Year Treasury was up sharply again and this has been adding a lot of pressure to the stock market, particularly the growth sector which impacts the Nasdaq. This chart compares the 10-year yield to the Nasdaq and at this point the question is, if we see new highs in the yield, will the Nasdaq retest those lows?
The peak in yields back in June marked a low for the Nasdaq, while the low in yields in early August came a week or so before the highs of the bear marker rally. By the way, the Nasdaq has been down for seven straight days. That's the longest losing streak in six years.
The dollar pushed up to new highs which adds to the trouble as prices tend to go down when the dollar goes up. You would think that would help inflation, and it may be, but it's not doing much for the stock market. We may find out next week in the CPI report.
Apple's chart is hovering near support but looking over a precipice if it doesn't hold. They are having their annual iPhone-centric fall conference starting today and perhaps it will be a market mover for Apple, and as goes Apple...
The indicators are getting oversold, sentiment is getting overly bearish and this can be a set up for some relief in stocks, but falling prices in a bear market market seem to fall further than we anticipate. When prices do bounce it tends to be a strong move, but it may not last long so if you're taking your shots here and there, stay nimble.
The next CPI report comes out on September 13 and the next Fed FOMC meeting is on the 20th and 21st.
Admin Note: We've started the 2022 NFL Survivor Pool and here's some info on how to get in. The deadline to sign up is Sunday the 11th at 1 PM ET. It's free, and very easy, and there are prizes for the top finishers. Pick one winner each week. Win, and you move on. Lose, and you're out. How many weeks can you last? Invite your friends if you want to compete with them. [More]
The S&P 500 (C-fund) opened higher but closed lower for the 6th time in 7 days. The support around 3900 is holding, but we aren't seeing any decent bounces yet. The only thing that looks good here is that it has come down so quickly that it may be due for relief. There's an open gap down near 3800, and another one up by 4220. I have a feeling both will get filled before the end of the year, but right now the downside gap is a lot closer.
The DWCPF (S-fund / small caps) is also dancing near support. This same support line is holding on the S&P 500 and Russell 2000, but the similar support line on the Nasdaq has been broken already. It's getting serious now with a 12% decline off the August peak with only one or two day rallies sprinkled in there.
EFA only lost 0.25% yesterday but don't forget about the generous price they gave the I-fund on Friday. There may be some fair value negative adjustments coming. They haven't posted Tuesday's price yet as I write this.
The BND (Bonds / F-fund) fell off the table yesterday as it tested and then fell below the September 1st low. This moves counter to yields so the stock market really wants to see yields ease and BND move up. Unfortunately there's not a lot of support until it hits the June low.
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 so much 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.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The Russia driven energy war seems to be coming to a head and the stock market is getting a little concerned, just to add to the list of concerns.
The Yield on the 10-Year Treasury was up sharply again and this has been adding a lot of pressure to the stock market, particularly the growth sector which impacts the Nasdaq. This chart compares the 10-year yield to the Nasdaq and at this point the question is, if we see new highs in the yield, will the Nasdaq retest those lows?
The peak in yields back in June marked a low for the Nasdaq, while the low in yields in early August came a week or so before the highs of the bear marker rally. By the way, the Nasdaq has been down for seven straight days. That's the longest losing streak in six years.
The dollar pushed up to new highs which adds to the trouble as prices tend to go down when the dollar goes up. You would think that would help inflation, and it may be, but it's not doing much for the stock market. We may find out next week in the CPI report.
Apple's chart is hovering near support but looking over a precipice if it doesn't hold. They are having their annual iPhone-centric fall conference starting today and perhaps it will be a market mover for Apple, and as goes Apple...
The indicators are getting oversold, sentiment is getting overly bearish and this can be a set up for some relief in stocks, but falling prices in a bear market market seem to fall further than we anticipate. When prices do bounce it tends to be a strong move, but it may not last long so if you're taking your shots here and there, stay nimble.
The next CPI report comes out on September 13 and the next Fed FOMC meeting is on the 20th and 21st.
Admin Note: We've started the 2022 NFL Survivor Pool and here's some info on how to get in. The deadline to sign up is Sunday the 11th at 1 PM ET. It's free, and very easy, and there are prizes for the top finishers. Pick one winner each week. Win, and you move on. Lose, and you're out. How many weeks can you last? Invite your friends if you want to compete with them. [More]
The S&P 500 (C-fund) opened higher but closed lower for the 6th time in 7 days. The support around 3900 is holding, but we aren't seeing any decent bounces yet. The only thing that looks good here is that it has come down so quickly that it may be due for relief. There's an open gap down near 3800, and another one up by 4220. I have a feeling both will get filled before the end of the year, but right now the downside gap is a lot closer.
The DWCPF (S-fund / small caps) is also dancing near support. This same support line is holding on the S&P 500 and Russell 2000, but the similar support line on the Nasdaq has been broken already. It's getting serious now with a 12% decline off the August peak with only one or two day rallies sprinkled in there.
EFA only lost 0.25% yesterday but don't forget about the generous price they gave the I-fund on Friday. There may be some fair value negative adjustments coming. They haven't posted Tuesday's price yet as I write this.
The BND (Bonds / F-fund) fell off the table yesterday as it tested and then fell below the September 1st low. This moves counter to yields so the stock market really wants to see yields ease and BND move up. Unfortunately there's not a lot of support until it hits the June low.
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 so much 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.
