Stocks opened higher, but tentatively on Thursday as investors seemed unsure how to interpret Nvidia's earnings report. Because of that, the large cap stocks of the Nasdaq closed the day flat while we saw the Dow and small caps gain over 1% on the day. The bulls started to take charge as the day wore on, and the small caps led again despite yields moving higher.
Nvidia had quite an interesting day, and even with all the skepticism of them not destroying estimates like they normally do, it was a solid report. We saw the stock and the index futures down in overnight trading, but by the open everything changed and the bulls took charge. Early on Nvidia made a new all time high, then sold off, then ended the day flat (+0.53%) to create a rare outside day.
It could have easily been a negative outside reversal day which, on a day that it makes a new high, could have been dangerously bearish. But the fact that it fought back to close with a slight gain makes it more neutral or even slightly bullish.
The internal numbers were very strong yesterday, even in the Nasdaq, despite it being flat on the day. The NYSE had ratios over 3 to 1 in favor of advancing issues and shares traded. The 162 new lows in the Nasdaq yesterday is an interesting tell that there is some kind of a rotation out of tech and into the broader, smaller companies.
I have posed this chart a couple of times in recent weeks which represents the Federal Reserve's liquidity, and when there is ample liquidity (easy money) with lower interest rates, stocks and other investment vehicles that trade in dollars, are likely going to do well. We saw a slight dip in that liquidity last week and we wondered if it was going to just retest the breakout line and resume higher, or if it would fall back into the descending channel. So far it looks good that liquidity may continue to flow.
And that's why stocks, gold, and other commodities have rallied, and of a course bitcoin blasted off this month. Trump's dovish view of bitcoin also helped here, but assets are rallying, and liquidity is a big part of the reason.
This chart shows that riskier assets will do well. Bitcoin had been moving sideways to lower for much of the year until the chart above broke out in late October. And then this happened.
And just to show that bitcoin isn't simply following the direction of the stock market, above is the year to date chart of the S&P 500 in comparison. I'm not saying go out an buy bitcoin. I'm saying this is why it has been going up, and if liquidity remains favorable, it will help stocks as well.
We get the Michigan Consumer Sentiment report this morning
Admin Note: Last reminder, I promise: For those of you who like to browse or participate in the TSP Talk Forums, we were able to get the TapaTalk mobile version of the forum working with the new software. I know some of you had become accustomed to that. However, I think the new forum software actually looks great on mobile devises without a special app. That was part of the appeal of the new software. Just go straight to https://forum.tsptalk.com/
The S&P 500 (C-fund) was up on Thursday and it did fill in the overhead gap from last week with its 0.53% gain. If it can get above yesterday's high, there is no other resistance below 6000, so with the seasonality on the bulls' side, it may take an unexpected bearish headline to keep this from making new highs before the end of the year, and likely sooner.
DWCPF (S-fund) gained 1.70% yesterday, once again leading the TSP funds in return. It opened another gap in the process. This one might get filled if we get some Thanksgiving week volatility, but so far the election gap remains open and doesn't look like it is going to be filled anytime soon. The underinvested are just to eager to buy the dips.
ACWX was up just 0.17% and it just can't seem to escape the strength in the dollar, which was up another 0.33% yesterday. You can see the updated TSP prices and returns posted by about 8:15 PM ET daily here: https://www.tsptalk.com/tsp_share_prices.php
BND (bonds / F-fund) was down slightly as yields remain sticky to the recent highs. The 200-day EMA continues to hold and resistance is just overhead.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
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.
| Daily TSP Funds Return
More returns |
Nvidia had quite an interesting day, and even with all the skepticism of them not destroying estimates like they normally do, it was a solid report. We saw the stock and the index futures down in overnight trading, but by the open everything changed and the bulls took charge. Early on Nvidia made a new all time high, then sold off, then ended the day flat (+0.53%) to create a rare outside day.
It could have easily been a negative outside reversal day which, on a day that it makes a new high, could have been dangerously bearish. But the fact that it fought back to close with a slight gain makes it more neutral or even slightly bullish.
The internal numbers were very strong yesterday, even in the Nasdaq, despite it being flat on the day. The NYSE had ratios over 3 to 1 in favor of advancing issues and shares traded. The 162 new lows in the Nasdaq yesterday is an interesting tell that there is some kind of a rotation out of tech and into the broader, smaller companies.
I have posed this chart a couple of times in recent weeks which represents the Federal Reserve's liquidity, and when there is ample liquidity (easy money) with lower interest rates, stocks and other investment vehicles that trade in dollars, are likely going to do well. We saw a slight dip in that liquidity last week and we wondered if it was going to just retest the breakout line and resume higher, or if it would fall back into the descending channel. So far it looks good that liquidity may continue to flow.
And that's why stocks, gold, and other commodities have rallied, and of a course bitcoin blasted off this month. Trump's dovish view of bitcoin also helped here, but assets are rallying, and liquidity is a big part of the reason.
This chart shows that riskier assets will do well. Bitcoin had been moving sideways to lower for much of the year until the chart above broke out in late October. And then this happened.
And just to show that bitcoin isn't simply following the direction of the stock market, above is the year to date chart of the S&P 500 in comparison. I'm not saying go out an buy bitcoin. I'm saying this is why it has been going up, and if liquidity remains favorable, it will help stocks as well.
We get the Michigan Consumer Sentiment report this morning
Admin Note: Last reminder, I promise: For those of you who like to browse or participate in the TSP Talk Forums, we were able to get the TapaTalk mobile version of the forum working with the new software. I know some of you had become accustomed to that. However, I think the new forum software actually looks great on mobile devises without a special app. That was part of the appeal of the new software. Just go straight to https://forum.tsptalk.com/
The S&P 500 (C-fund) was up on Thursday and it did fill in the overhead gap from last week with its 0.53% gain. If it can get above yesterday's high, there is no other resistance below 6000, so with the seasonality on the bulls' side, it may take an unexpected bearish headline to keep this from making new highs before the end of the year, and likely sooner.
DWCPF (S-fund) gained 1.70% yesterday, once again leading the TSP funds in return. It opened another gap in the process. This one might get filled if we get some Thanksgiving week volatility, but so far the election gap remains open and doesn't look like it is going to be filled anytime soon. The underinvested are just to eager to buy the dips.
ACWX was up just 0.17% and it just can't seem to escape the strength in the dollar, which was up another 0.33% yesterday. You can see the updated TSP prices and returns posted by about 8:15 PM ET daily here: https://www.tsptalk.com/tsp_share_prices.php
BND (bonds / F-fund) was down slightly as yields remain sticky to the recent highs. The 200-day EMA continues to hold and resistance is just overhead.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
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.
