It was a relatively flat day on Thursday but once again an early rally faded. One change from recent action yesterday was that we saw a strong close to move the indices from moderate losses to that flat line, although the Nasdaq closed with a moderate gain. The Dow lost 40-points while the S&P 500 and small caps closed with slight gains.
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Initial jobless claims came in slightly higher than expected (which is weaker than expectations) but the market battled back from some steep overnight futures losses to close relative flat, depending on the index. It was very slow trading and trading volume remained eerily light, and that may be a slightly bullish edge, but today's volume should explode being a quadruple witching expiration day.
You would think that would trigger some volatility but there should be an effort to keep things quiet and the S&P 500 as close to 3100 as possible. The S&P closed at 3115 yesterday.
I think the market has been programmed to dismiss this type of information, but a tweet from President Trump after the bell yesterday regarding the trade deal with China may have raised some nerves as he talked about decoupling from them being an option.
"It was not Ambassador Lighthizer’s fault (yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China."
The futures opened modestly higher shortly afterward so there doesn't seem to be any initial concern, but we've seen some wild overnight swings lately so it's hard to say. Just know that if the market is looking for the next catalyst, trade is still out there.
There's no doubt that the indices look a little tired as they fail to reach up to last week's highs, but so far the bears haven't put on a whole lot of pressure since last Thursday's big sell-off. Volatility may pick up again after today's expiration, but who will take control - the bulls or the bears?
The S&P 500 (C-fund) was flat yesterday as the bulls did a pretty good job holding back the bears who were growling overnight when the S&P futures were down close to 40 points. The low on Monday looks fairly solid being that it bounced off the 50 and 200-day EMAs, so that is a key level that needs to hold for the bulls.
The DWCPF (S-fund) was up moderately yesterday but still saw a lower low and lower high from the previous day, so it was still part of a 3 day pullback to me. This is about where the bulls would normally show up, so if they don't...
The EFA (I-fund) was down yesterday as the early weakness in U.S. stocks held overseas markets down while they were still open, plus the dollar continued to bounce off its recent lows.
The Transportation Index is making me a little nervous continuing to stay below the 200-day EMA, but it does remain in that rising trading channel and it could be just churning before its next move.
The price of copper and lumber have been doing well lately, signs of an improving economy. Lumber broke out yesterday while copper is digesting a recent breakout above key resistance, which is now holding as support.
BND (bonds / F-fund) had a good day yesterday as the yield on the 10-year Treasury fell back below 0.70%. The technical setup looks fine, but this is such a choppy market that buying low and selling high may work better than just following the trend.
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. Have a great weekend!
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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[TD="align: center"] Daily TSP Funds Return
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[TD][/TD]
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Initial jobless claims came in slightly higher than expected (which is weaker than expectations) but the market battled back from some steep overnight futures losses to close relative flat, depending on the index. It was very slow trading and trading volume remained eerily light, and that may be a slightly bullish edge, but today's volume should explode being a quadruple witching expiration day.
You would think that would trigger some volatility but there should be an effort to keep things quiet and the S&P 500 as close to 3100 as possible. The S&P closed at 3115 yesterday.
I think the market has been programmed to dismiss this type of information, but a tweet from President Trump after the bell yesterday regarding the trade deal with China may have raised some nerves as he talked about decoupling from them being an option.
"It was not Ambassador Lighthizer’s fault (yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China."
The futures opened modestly higher shortly afterward so there doesn't seem to be any initial concern, but we've seen some wild overnight swings lately so it's hard to say. Just know that if the market is looking for the next catalyst, trade is still out there.
There's no doubt that the indices look a little tired as they fail to reach up to last week's highs, but so far the bears haven't put on a whole lot of pressure since last Thursday's big sell-off. Volatility may pick up again after today's expiration, but who will take control - the bulls or the bears?
The S&P 500 (C-fund) was flat yesterday as the bulls did a pretty good job holding back the bears who were growling overnight when the S&P futures were down close to 40 points. The low on Monday looks fairly solid being that it bounced off the 50 and 200-day EMAs, so that is a key level that needs to hold for the bulls.
The DWCPF (S-fund) was up moderately yesterday but still saw a lower low and lower high from the previous day, so it was still part of a 3 day pullback to me. This is about where the bulls would normally show up, so if they don't...
The EFA (I-fund) was down yesterday as the early weakness in U.S. stocks held overseas markets down while they were still open, plus the dollar continued to bounce off its recent lows.
The Transportation Index is making me a little nervous continuing to stay below the 200-day EMA, but it does remain in that rising trading channel and it could be just churning before its next move.
The price of copper and lumber have been doing well lately, signs of an improving economy. Lumber broke out yesterday while copper is digesting a recent breakout above key resistance, which is now holding as support.
BND (bonds / F-fund) had a good day yesterday as the yield on the 10-year Treasury fell back below 0.70%. The technical setup looks fine, but this is such a choppy market that buying low and selling high may work better than just following the trend.
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. Have a great weekend!
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.
