Another wave of green hit Wall Street on Monday, although it wasn't quite as positive as the indices might indicate. The Dow gained 9-points after a late dip took it off its highs, but the Nasdaq had a monster day thanks to Amazon. Despite the Russell 2000 small cap index closing down on the day, the DWCPF Dow Completion Index, which is what our S-fund tracks, did quite well.
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There was a bit of a fade into the close yesterday, but those losses were quickly recouped after hours, when IBM posted a stronger than expected earnings report. Of course those after hour moves don't mean anything unless they hold into today's open.
The action yesterday may not have been as good as it appeared. The Nasdaq stole the show and the 235-point gain in Amazon was a good reason for that. Amazon also helped the S&P 500, but the Dow was basically flat, the Transports were down sharply with airlines stocks getting hit hard, and as I mentioned, the Russell 2000 was also down on the day.
The advance decline line was surprisingly negative on the NYSE Composite Index yesterday, with more stocks finishing down than up. The Nasdaq saw a slight advantage to the advancers, but not by as much as you might expect considering a 2.5% gain on the day.
The S&P 500 Equal Weight Index, which gives each company in then S&P 500 the same weighting, as opposed to the S&P 500 Index itself which heavily favors the larger companies, was actually down a half of a percent yesterday, so there are divergences out there.
These are potential warning signs despite the gains and seemingly strong action, though there's nothing that says it can't continue this way for a while.
The S&P 500 (C-fund) broke out on lighter than normal volume, so it wasn't a "get in at any cost" type of day. However, at these levels, the shorts (those betting against the S&P 500) have to be getting nervous, and / or stopped out of those short positions now that the resistance is being broken. That could fuel a short-term rally, but it would also be vulnerable to a pullback back to the resistance line soon afterward.
The year to date chart shows that the next upside targets could be the open gap near 3330, and then the February peak, which was 3394.
The DWCPF (S-fund) pushed up to test the prior peak, but unlike the S&P 500, it didn't break through yet. Still, a 0.77% gain is quite impressive considering the Russell 2000 small cap index was down on the day. There is still an open gap below (blue) that could demand some attention at some point in the near future.
Here's that Russell 2000 chart. The bad news was the weakness yesterday given the strength in other indices, but that does look like a small bull flag that could be ready to push higher to test the prior peak.
The EFA (I-fund) did close at its highest level since February, but still no official breakout.
BND (bond ETF) ... what else can we say. The most recent days' action saw it close below its opening price - hence the black candlesticks, but the trend is clearly up.
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
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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There was a bit of a fade into the close yesterday, but those losses were quickly recouped after hours, when IBM posted a stronger than expected earnings report. Of course those after hour moves don't mean anything unless they hold into today's open.
The action yesterday may not have been as good as it appeared. The Nasdaq stole the show and the 235-point gain in Amazon was a good reason for that. Amazon also helped the S&P 500, but the Dow was basically flat, the Transports were down sharply with airlines stocks getting hit hard, and as I mentioned, the Russell 2000 was also down on the day.
The advance decline line was surprisingly negative on the NYSE Composite Index yesterday, with more stocks finishing down than up. The Nasdaq saw a slight advantage to the advancers, but not by as much as you might expect considering a 2.5% gain on the day.
The S&P 500 Equal Weight Index, which gives each company in then S&P 500 the same weighting, as opposed to the S&P 500 Index itself which heavily favors the larger companies, was actually down a half of a percent yesterday, so there are divergences out there.
These are potential warning signs despite the gains and seemingly strong action, though there's nothing that says it can't continue this way for a while.
The S&P 500 (C-fund) broke out on lighter than normal volume, so it wasn't a "get in at any cost" type of day. However, at these levels, the shorts (those betting against the S&P 500) have to be getting nervous, and / or stopped out of those short positions now that the resistance is being broken. That could fuel a short-term rally, but it would also be vulnerable to a pullback back to the resistance line soon afterward.
The year to date chart shows that the next upside targets could be the open gap near 3330, and then the February peak, which was 3394.
The DWCPF (S-fund) pushed up to test the prior peak, but unlike the S&P 500, it didn't break through yet. Still, a 0.77% gain is quite impressive considering the Russell 2000 small cap index was down on the day. There is still an open gap below (blue) that could demand some attention at some point in the near future.
Here's that Russell 2000 chart. The bad news was the weakness yesterday given the strength in other indices, but that does look like a small bull flag that could be ready to push higher to test the prior peak.
The EFA (I-fund) did close at its highest level since February, but still no official breakout.
BND (bond ETF) ... what else can we say. The most recent days' action saw it close below its opening price - hence the black candlesticks, but the trend is clearly up.
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
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.
