We came into Tuesday after Monday's negative reversal day which generally means we will see lower prices the following day. Well, we did as more warnings from Target added to the already negative overnight futures and the indices opened the day down about 1%. But then it was as if someone threw a switch as stocks started to come back and we ended with a solid day of gains across the board. The Dow erased a 275 point morning loss and turned it into a 264-point gain. Small caps led up the upside with a gain well over 1% on the day.
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Directly after the closing bell we saw most of the final hour gains given back in the futures market so Wednesday will start with a bit of a headwind, but the markets have been so whippy inside of its recent short term trading range that we're almost bound to revisit the top and bottom of that range today anyway unless the bulls, or the bears make a stand and take us out of that range, which happens to resemble a bull flag.
The yield on the 10-year Treasury pulled back and closed just below that key 3% level yesterday at 2.97%. Translation, the F-fund was up since bond prices go up as yields come down.
The internals were solid again with share volume nearly 3 to 1 in favor of advancers over decliners despite the sharply lower open on Tuesday, so Monday's negative reversal led to a positive reversal day on Tuesday keeping the whippy flavor to this market alive.
The Dow Transportation Index has been holding up very well and although it wasn't up much, yesterday's positive reversal day bodes well for a potential attempt to take on the 50 (purple) and 300 (orange) day EMAs as the index battles a plethora of overhead resistance.
Along with the Transports, the small caps of the Russell 2000 are another market leader and this index is also making an attempt to push through a key descending resistance line, after closing solidly above the 50-day EMA yesterday.
The charts are improving but the price of oil, natural gas, and basically the prices of many foods and fuel could be an anchor on the economy. The question is, how much inflation has the market already priced in?
I'll remind you of the important CPI report which could make or break this bear market rally on Friday.
We have had a lot of new eyes viewing TSP Talk recently looking for answers to some of the problems the new TSP website has created for some of us. Many have found their way to the forum already but if you haven't we have some informative discussions going on regarding the TSP website upgrade, creating new accounts, IFTs, etc. Chances are, if you are having a problem, someone else may have also had the problem and some have figured it out. If you have figured out a problem, we'd appreciate it if you shared your solution. Here's the link to those discussions:
https://www.tsptalk.com/mb/tsp-talk-news-etc-/
The one change that has been impacting TSP Talk is when I post the daily share prices and update the AutoTracker. The tsp.gov share prices used to get posted just after 7 PM ET each day but since the upgrade it has been several hours later - sometimes so late that I can't get to it until the following morning.
Hopefully that is just a temporary issue while they work on all of the other issues. Otherwise, not only will the AutoTracker be updated later every day, but it may impact my schedule of when I upload the daily commentaries.
The S&P 500 (C-fund) moved right back up to the top of its bull flag after opening near the lower end. This formation is starting to grow on me but, while it is more likely to break to the upside, there's no rule that says it can't break to the downside, especially if we get some kind of headline or economic data that ruins the formation. However, bullish formations usually mean the good news is coming. "They", the professional traders, won't make it easy on market timers and they may try to shake the bulls out beforehand, so nothing would surprise me in the short term. There is an area near 4058 that could be considered an open gap and that could get revisited if they try to shake the bulls out.
The DWCPF (S-fund) had a big day and it is now at an important pivot point as it sits just below the 50-day EMA, the major descending resistance line, and the top of what I have been calling a possible bear flag. There is a lot of room down below if it can't breakout above that resistance.
The EFA (I-fund) has been chopping around in an area that has been the home of several open gaps in the past, making 69 and 71 very key levels. It's OK if it remains in that range, but the direction of the breakout will be very determinant.
BND (bonds / F-fund) had a good day with yields dipping, but there's some new potential resistance at the old broken support line near 76.
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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Directly after the closing bell we saw most of the final hour gains given back in the futures market so Wednesday will start with a bit of a headwind, but the markets have been so whippy inside of its recent short term trading range that we're almost bound to revisit the top and bottom of that range today anyway unless the bulls, or the bears make a stand and take us out of that range, which happens to resemble a bull flag.
The yield on the 10-year Treasury pulled back and closed just below that key 3% level yesterday at 2.97%. Translation, the F-fund was up since bond prices go up as yields come down.
The internals were solid again with share volume nearly 3 to 1 in favor of advancers over decliners despite the sharply lower open on Tuesday, so Monday's negative reversal led to a positive reversal day on Tuesday keeping the whippy flavor to this market alive.
The Dow Transportation Index has been holding up very well and although it wasn't up much, yesterday's positive reversal day bodes well for a potential attempt to take on the 50 (purple) and 300 (orange) day EMAs as the index battles a plethora of overhead resistance.
Along with the Transports, the small caps of the Russell 2000 are another market leader and this index is also making an attempt to push through a key descending resistance line, after closing solidly above the 50-day EMA yesterday.
The charts are improving but the price of oil, natural gas, and basically the prices of many foods and fuel could be an anchor on the economy. The question is, how much inflation has the market already priced in?
I'll remind you of the important CPI report which could make or break this bear market rally on Friday.
We have had a lot of new eyes viewing TSP Talk recently looking for answers to some of the problems the new TSP website has created for some of us. Many have found their way to the forum already but if you haven't we have some informative discussions going on regarding the TSP website upgrade, creating new accounts, IFTs, etc. Chances are, if you are having a problem, someone else may have also had the problem and some have figured it out. If you have figured out a problem, we'd appreciate it if you shared your solution. Here's the link to those discussions:
https://www.tsptalk.com/mb/tsp-talk-news-etc-/
The one change that has been impacting TSP Talk is when I post the daily share prices and update the AutoTracker. The tsp.gov share prices used to get posted just after 7 PM ET each day but since the upgrade it has been several hours later - sometimes so late that I can't get to it until the following morning.
Hopefully that is just a temporary issue while they work on all of the other issues. Otherwise, not only will the AutoTracker be updated later every day, but it may impact my schedule of when I upload the daily commentaries.
The S&P 500 (C-fund) moved right back up to the top of its bull flag after opening near the lower end. This formation is starting to grow on me but, while it is more likely to break to the upside, there's no rule that says it can't break to the downside, especially if we get some kind of headline or economic data that ruins the formation. However, bullish formations usually mean the good news is coming. "They", the professional traders, won't make it easy on market timers and they may try to shake the bulls out beforehand, so nothing would surprise me in the short term. There is an area near 4058 that could be considered an open gap and that could get revisited if they try to shake the bulls out.
The DWCPF (S-fund) had a big day and it is now at an important pivot point as it sits just below the 50-day EMA, the major descending resistance line, and the top of what I have been calling a possible bear flag. There is a lot of room down below if it can't breakout above that resistance.
The EFA (I-fund) has been chopping around in an area that has been the home of several open gaps in the past, making 69 and 71 very key levels. It's OK if it remains in that range, but the direction of the breakout will be very determinant.
BND (bonds / F-fund) had a good day with yields dipping, but there's some new potential resistance at the old broken support line near 76.
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.
