Stocks rebounded from sharp early selling on Monday to close well off the lows and closer to the highs of the day. The Dow lost 54-points, but it had been down over 250, and in the case of the Russell 2000 small caps, it managed to climb although back into positive territory by the close, although our S-fund didn't quite get there. Bonds were down, as was the dollar, which helped give the I-fund a positive return yesterday.
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The internals were good with advancing issues slightly higher than declining, but the share volume was actually quite positive. Also, a lot more new highs than new lows, which is a change from a week ago.
The dollar was down again and that helped some commodities to a good day with gold up about $30 an oz., and oil up over 1.4%.
Lumber was an exception as the parabolic price rise has come to an end over the last several days. Just a reminder that this was trading under $300 after the COVID crash. Depending on how you define one, the decline off the peak puts this in a bear market having come 26% off the highs. Of course that just puts it where it was on April 30 after filling in the gap created that day, so let's put things in perspective. I don't quite think the homebuilding bull market is crashing yet.
Yesterday's action seemed bullish because the bears weren't able to do much damage despite having the advantage in early trading.
The S&P 500 (C-fund) took a dive yesterday but battled nicely to climb back above the 20-day EMA and the red rising support line by the close, which is a good sign. There is still some open gap left from last Tuesday and there's always a chance that it gets filled but turns into resistance, which would not be good. At this point it's new highs or bust for this leg higher off the recent lows. If this rolls over before we see new highs, especially the way some of the broader indices like the Nasdaq and small caps have been lagging, all bets are off. And the Nasdaq has been looking quite ugly.
The DWCPF (S-fund) ended the day with a small loss, which is a victory after the monster two-day rally. But it has the 50 and 20 day EMAs overhead and if they pose any trouble, the bears will make another move to push this lower. Pausing there on the way up for a day isn't a deal breaker, but rolling over before then would not be good.
The EFA (I-fund) saw a modest loss and remains in a bullish rising trading channel above its 50-day EMA. There are open gaps above and below yesterday's range, and that means it could easily go either way, while maintaining that bullish trend. So, the I-fund could get whippy in the short term.
The Transportation Index and the High Yield Corporate Bonds were both down modestly and inline with the other indices, so not much to show there.
BND (F-fund) was down slightly but for a second day in a row it failed to get back above the 20-day EMA. The 50-day EMA and the bottom of the trading channel are next so this has some work to do to improve the technical picture.
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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The internals were good with advancing issues slightly higher than declining, but the share volume was actually quite positive. Also, a lot more new highs than new lows, which is a change from a week ago.
The dollar was down again and that helped some commodities to a good day with gold up about $30 an oz., and oil up over 1.4%.
Lumber was an exception as the parabolic price rise has come to an end over the last several days. Just a reminder that this was trading under $300 after the COVID crash. Depending on how you define one, the decline off the peak puts this in a bear market having come 26% off the highs. Of course that just puts it where it was on April 30 after filling in the gap created that day, so let's put things in perspective. I don't quite think the homebuilding bull market is crashing yet.
Yesterday's action seemed bullish because the bears weren't able to do much damage despite having the advantage in early trading.
The S&P 500 (C-fund) took a dive yesterday but battled nicely to climb back above the 20-day EMA and the red rising support line by the close, which is a good sign. There is still some open gap left from last Tuesday and there's always a chance that it gets filled but turns into resistance, which would not be good. At this point it's new highs or bust for this leg higher off the recent lows. If this rolls over before we see new highs, especially the way some of the broader indices like the Nasdaq and small caps have been lagging, all bets are off. And the Nasdaq has been looking quite ugly.
The DWCPF (S-fund) ended the day with a small loss, which is a victory after the monster two-day rally. But it has the 50 and 20 day EMAs overhead and if they pose any trouble, the bears will make another move to push this lower. Pausing there on the way up for a day isn't a deal breaker, but rolling over before then would not be good.
The EFA (I-fund) saw a modest loss and remains in a bullish rising trading channel above its 50-day EMA. There are open gaps above and below yesterday's range, and that means it could easily go either way, while maintaining that bullish trend. So, the I-fund could get whippy in the short term.
The Transportation Index and the High Yield Corporate Bonds were both down modestly and inline with the other indices, so not much to show there.
BND (F-fund) was down slightly but for a second day in a row it failed to get back above the 20-day EMA. The 50-day EMA and the bottom of the trading channel are next so this has some work to do to improve the technical picture.
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.
