The bears finally showed some teeth after the bulls had pushed the indices above some key moving averages. The S&P had been up 7 of the previous 8 trading days but of course stocks don't go up everyday, even in the strongest of bull markets. It was some bearish comments from the CEO of JPMorgan Chase, plus a decline in jobs openings from the JOLTS report suggesting a possible negative turn in the jobs market, that gave investors a reason to take some profits, and only time will tell if the losses yesterday were anything more than just that. Yields and the dollar continue to slip lower suggesting economic weakness.
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Jamie Dimon, the CEO of JPMorgan Chase, made comments about the banking sector and the state of the economy saying, "The current crisis is not yet over, & even when it is behind us, there will be repercussions from it for years to come…Essentially, we may be moving, as I read somewhere, from a virtuous cycle to a vicious cycle."
The selling did little to upset the recent uptrend, although the action did produce a short term reversal pattern, but so far there is nothing to suggesting that it is more than some overbought profit taking. It could be, but we may not see any heavy selling unless we see get technical breakdowns in the charts, and that hasn't happened yet, although the small caps are looking suspect again.
Yields continue to slide and yesterday they fell to their lowest closing level since late last summer. The bearish looking flag appears to be breaking down again after that false breakdown and reversal a week or so again, which triggered to rally in the stock market.
The dollar is also pulling back as quickly as it went up in February. This is helping prices move higher, and we have been seeing this in the price of oil, as we talked about yesterday, and gold, which has been moving to new highs recently.
When gold and bonds are leading the market it suggests investors may be selling stocks and moving to a safe haven, rather than a typical pullback for stocks, so this is may be a bit of a red flag.
I don't want to get too speculative after one down day in a recent rally, but there are some cracks in the fundamentals and some technicals with those small caps still looking vulnerable compared to the S&P 500.
The stock market is closed on Friday for Easter weekend and the TSP will not post prices nor process transactions (IFTs) that day, so I will not post a daily commentary on Friday.
However, we will still get the March jobs report on Friday and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%.
The S&P 500 (C-fund) was down on Tuesday but so far no damage was done to the rising trading channel. There was a negative outside reversal day but having it close above Monday's lows kept it from being a full blown reversal pattern. There is an old filled gap near 4075 that seems to be a meaningful area, and a fill again today would test the bottom of that red channel. It could be a lure, but whether it holds or not is the only thing that matters. Otherwise it would be just noise within the channel. 4000 still looks like an interesting area to retest as the moving averages and the old descending resistance line cross there.
The DWCPF (S-fund) is trying to hang onto that bear flag as it was flirting with breaking out recently, but it still has that bearish look to it now that it pulled back into the flag again. A move over 1700 would nullify the flag but being back below the 50-day EMA and in that flag give this chart something to be worried about. Like the yield chart up above, the fake breakdown and reversal on March 24 may have been the way to get the excess bears, who were calling for that breakdown from that flag - including myself, to get back on the bullish side before they pulled that rug out again.
The EFA (I-fund) is enjoying the sell off in the dollar, but the open gaps are looming below and a double top is just above, so this may be getting overly extended and ready for some backing and filling.
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.
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Jamie Dimon, the CEO of JPMorgan Chase, made comments about the banking sector and the state of the economy saying, "The current crisis is not yet over, & even when it is behind us, there will be repercussions from it for years to come…Essentially, we may be moving, as I read somewhere, from a virtuous cycle to a vicious cycle."
The selling did little to upset the recent uptrend, although the action did produce a short term reversal pattern, but so far there is nothing to suggesting that it is more than some overbought profit taking. It could be, but we may not see any heavy selling unless we see get technical breakdowns in the charts, and that hasn't happened yet, although the small caps are looking suspect again.
Yields continue to slide and yesterday they fell to their lowest closing level since late last summer. The bearish looking flag appears to be breaking down again after that false breakdown and reversal a week or so again, which triggered to rally in the stock market.
The dollar is also pulling back as quickly as it went up in February. This is helping prices move higher, and we have been seeing this in the price of oil, as we talked about yesterday, and gold, which has been moving to new highs recently.
When gold and bonds are leading the market it suggests investors may be selling stocks and moving to a safe haven, rather than a typical pullback for stocks, so this is may be a bit of a red flag.
I don't want to get too speculative after one down day in a recent rally, but there are some cracks in the fundamentals and some technicals with those small caps still looking vulnerable compared to the S&P 500.
The stock market is closed on Friday for Easter weekend and the TSP will not post prices nor process transactions (IFTs) that day, so I will not post a daily commentary on Friday.
However, we will still get the March jobs report on Friday and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%.
The S&P 500 (C-fund) was down on Tuesday but so far no damage was done to the rising trading channel. There was a negative outside reversal day but having it close above Monday's lows kept it from being a full blown reversal pattern. There is an old filled gap near 4075 that seems to be a meaningful area, and a fill again today would test the bottom of that red channel. It could be a lure, but whether it holds or not is the only thing that matters. Otherwise it would be just noise within the channel. 4000 still looks like an interesting area to retest as the moving averages and the old descending resistance line cross there.
The DWCPF (S-fund) is trying to hang onto that bear flag as it was flirting with breaking out recently, but it still has that bearish look to it now that it pulled back into the flag again. A move over 1700 would nullify the flag but being back below the 50-day EMA and in that flag give this chart something to be worried about. Like the yield chart up above, the fake breakdown and reversal on March 24 may have been the way to get the excess bears, who were calling for that breakdown from that flag - including myself, to get back on the bullish side before they pulled that rug out again.
The EFA (I-fund) is enjoying the sell off in the dollar, but the open gaps are looming below and a double top is just above, so this may be getting overly extended and ready for some backing and filling.
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.
