Another mostly green day for stocks yesterday with the Dow tacking on another 139-points, and the S&P 500 and Nasdaq adding similar percentage gains. The small caps lagged a bit but came back from earlier losses to close nearly flat. The Dow Transportation Index had an interesting day, and we'll discuss that below. The I-fund had to negotiate through another rally in the dollar. Yields were down again, as was oil, gold, and silver. The bulls remain in charge despite the rubber band getting stretched to near threads.
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Yesterday the Dow Transportation Index had one of its biggest daily gains that I can recall, yet it closed about 1,200 points off its intraday highs. Talk about a negative reversal, but in the process of making a negative reversal, the index still gained nearly 7%.
Why? Avis gained 108% on the day after reporting huge earnings. That certainly is an anomaly so it will be interesting to see if the high in the Transports yesterday is some kind of peaking action?
The Fed's FOMC meeting resumes today and we usually hear the policy statement at about 2 PM ET. Will a tapering announcement finally shake up this market? Will they give clues for their plan to raise interest rates in 2022? With they tell us inflation is under control, or running too hot? They say all of this is already priced into the market, that is unless we get thrown a surprise, or if the market really isn't prepared for a tighter monetary policy..
The S&P 500 (C-fund) just keeps chugging along. That's 13 out of 15 positive days. With the Fed on deck, is this ripe for profit taking, or will the Fed throw more ammunition to the bulls? It would seem that ay additional dovish actions would be irresponsible at this point, with the gains we've seen already this year, but that would be par for the course for the Fed who does not want to see any stock market or economic hardships on their watch, especially after COVID snuck up on them last year.
The DWCPF (S-fund) lagged a bit but it was coming off a giant gain on Monday. Monday's rally pushed it above some resistance to new highs, and yesterday's morning dip actually found support at that old resistance line. Could that mean those open gaps are safe? I don't know about that, but the longer it stays above about 2330, the more solid that support becomes.
The EFA (I-fund) was down slightly with the dollar up 0.24%. That prior peak has temporarily held as resistance for a second day. There always seem to be open gaps on this chart because of the overnight trading in the overseas markets, but they can be filled as easily as the U.S. chart's gaps. There are actually more than the two open gaps that I highlighted below.
BND (Bonds / F-fund) remains in the flag but it managed to close above the 200-day EMA, although stalled for a fourth day below that 50-day EMA. The bear flag gives the bears an edge here but if it can get above all of that resistance some how, perhaps bonds can rally, because we know yields look as if they are going to move lower, as we showed up above.
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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Internally the NYSE was negative, mostly because of some weakness in the broader Russell 2000 and mid-caps indices. The Nasdaq did fine with heavier volume on the advancing side.
The yield on the 10-year Treasury was down again, and that small loss pushed it low enough to call it a bear flag breakdown, and the initial downside target would be about 1.4%, and if that happens it would be a little shocking as far as why, but the open gap in that same area confirms the possibility.
The yield on the 10-year Treasury was down again, and that small loss pushed it low enough to call it a bear flag breakdown, and the initial downside target would be about 1.4%, and if that happens it would be a little shocking as far as why, but the open gap in that same area confirms the possibility.
Yesterday the Dow Transportation Index had one of its biggest daily gains that I can recall, yet it closed about 1,200 points off its intraday highs. Talk about a negative reversal, but in the process of making a negative reversal, the index still gained nearly 7%.
Why? Avis gained 108% on the day after reporting huge earnings. That certainly is an anomaly so it will be interesting to see if the high in the Transports yesterday is some kind of peaking action?
The Fed's FOMC meeting resumes today and we usually hear the policy statement at about 2 PM ET. Will a tapering announcement finally shake up this market? Will they give clues for their plan to raise interest rates in 2022? With they tell us inflation is under control, or running too hot? They say all of this is already priced into the market, that is unless we get thrown a surprise, or if the market really isn't prepared for a tighter monetary policy..
The S&P 500 (C-fund) just keeps chugging along. That's 13 out of 15 positive days. With the Fed on deck, is this ripe for profit taking, or will the Fed throw more ammunition to the bulls? It would seem that ay additional dovish actions would be irresponsible at this point, with the gains we've seen already this year, but that would be par for the course for the Fed who does not want to see any stock market or economic hardships on their watch, especially after COVID snuck up on them last year.
The DWCPF (S-fund) lagged a bit but it was coming off a giant gain on Monday. Monday's rally pushed it above some resistance to new highs, and yesterday's morning dip actually found support at that old resistance line. Could that mean those open gaps are safe? I don't know about that, but the longer it stays above about 2330, the more solid that support becomes.
The EFA (I-fund) was down slightly with the dollar up 0.24%. That prior peak has temporarily held as resistance for a second day. There always seem to be open gaps on this chart because of the overnight trading in the overseas markets, but they can be filled as easily as the U.S. chart's gaps. There are actually more than the two open gaps that I highlighted below.
BND (Bonds / F-fund) remains in the flag but it managed to close above the 200-day EMA, although stalled for a fourth day below that 50-day EMA. The bear flag gives the bears an edge here but if it can get above all of that resistance some how, perhaps bonds can rally, because we know yields look as if they are going to move lower, as we showed up above.
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.
