We saw another midday lull in stocks after a strong open on Thursday, but unlike Wednesday, there was some buying into the close yesterday. The Dow gained 243-points while the S&P 500 and Nasdaq closed positive for the 6th straight day, both ending the day at new closing highs, although the Nasdaq lagged with Tesla losses being a drag. Bonds were up as yields slipped lower despite a stronger than expected GDP number. The dollar was up giving the I-fund some headwinds.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[/TD]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The 4th quarter GDP (economic growth) came in at 3.3%, much better than the 2.0% to 2.2% that was expected. There were also signs of inflation relief which helped push yields lower, but today's PCE Prices and Personal Spending reports will have more of an impact.
After the bell yesterday there were several disappointing earnings reports released, with Intel being the main concern as it traded down about 8% after hours, pulling the index futures down with it, particularly the Nasdaq. Next week the biggest of the big tech stocks will report and Meta, Microsoft, and Alphabet all closed at new highs yesterday. That's a little concerning as it sets up a potential sell the news reaction to good or bad reports.
Yesterday we saw a nice pick up in market breadth with the NYSE having a 3 to 1 advancing to declining stocks and volume ratio with 6 new highs for every new low. The Nasdaq was closer to 2 to 1 positive, however the new lows picked up.
The 10-year yield was down modestly which helped the small caps participate in the rally yesterday, and the bearish flag-like formation continues to grow and the 50-day EMA is trying to hold it down.
The dollar was up sharply making the I-fund the underperformer of the day, although it did close with a gain. The open gaps are all over this chart so it's tough to say where it wants to go next. The inverted head and shoulders pattern (blue) suggests it wants to break to the upside, but will it do so before filling out the right shoulder of the inverted head and shoulders pattern (blue) and the open gap within the right shoulder?
After today's PCE inflation data we will get more Magnificent Seven earnings next week plus the Fed's FOMC meeting and their decision on interest rates. Buckle up - it could be a wild week. The January seasonality chart shows that the end of January can be choppy.
Chart provided courtesy of www.sentimentrader.com
The S&P 500 and Nasdaq have been up for six consecutive days and last night's earnings could give them an excuse to take a day off, but small caps have been struggling in comparison so is it possible that they will get some attention because of this, and actually see some rotational buying, or will a falling tide sink all ships?
The S&P 500 (C-fund) was up for a 6th straight day but it hasn't been running away. The last four days look more like a consolidation after the big breakout move last week. Earnings after the bell yesterday could put some pressure on the chart and it will be important for 4460 - 4600 to hold on any pullback.
DWCPF (S-fund) has also been churning sideways. I don't like that it closed well off its highs for 3+ straight days, but so far the chart is holding firmly above key levels. I'll be curious to see if the small caps get some attention if the large caps dip on the Intel earnings today.
EFA (I-fund) was up modestly despite a rally in the dollar, so that showed some strength in the overseas markets. There's a lot going on in the chart and it isn't clear which way it wants to go, but as along as it remains above the 20-day EMA, and even the 50-day EMA, I have to give the bulls the nod here.
BND (F-fund) was up nicely and remained in the bullish looking flag. It fell a couple of pennies short of getting back above its 20-day EMA, but as of now this looks fine. A favorable PCE report could help push it to the top of the flag as the chart is suggesting the news could be good.
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
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.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The 4th quarter GDP (economic growth) came in at 3.3%, much better than the 2.0% to 2.2% that was expected. There were also signs of inflation relief which helped push yields lower, but today's PCE Prices and Personal Spending reports will have more of an impact.
After the bell yesterday there were several disappointing earnings reports released, with Intel being the main concern as it traded down about 8% after hours, pulling the index futures down with it, particularly the Nasdaq. Next week the biggest of the big tech stocks will report and Meta, Microsoft, and Alphabet all closed at new highs yesterday. That's a little concerning as it sets up a potential sell the news reaction to good or bad reports.
Yesterday we saw a nice pick up in market breadth with the NYSE having a 3 to 1 advancing to declining stocks and volume ratio with 6 new highs for every new low. The Nasdaq was closer to 2 to 1 positive, however the new lows picked up.
The 10-year yield was down modestly which helped the small caps participate in the rally yesterday, and the bearish flag-like formation continues to grow and the 50-day EMA is trying to hold it down.
The dollar was up sharply making the I-fund the underperformer of the day, although it did close with a gain. The open gaps are all over this chart so it's tough to say where it wants to go next. The inverted head and shoulders pattern (blue) suggests it wants to break to the upside, but will it do so before filling out the right shoulder of the inverted head and shoulders pattern (blue) and the open gap within the right shoulder?
After today's PCE inflation data we will get more Magnificent Seven earnings next week plus the Fed's FOMC meeting and their decision on interest rates. Buckle up - it could be a wild week. The January seasonality chart shows that the end of January can be choppy.
Chart provided courtesy of www.sentimentrader.com
The S&P 500 and Nasdaq have been up for six consecutive days and last night's earnings could give them an excuse to take a day off, but small caps have been struggling in comparison so is it possible that they will get some attention because of this, and actually see some rotational buying, or will a falling tide sink all ships?
The S&P 500 (C-fund) was up for a 6th straight day but it hasn't been running away. The last four days look more like a consolidation after the big breakout move last week. Earnings after the bell yesterday could put some pressure on the chart and it will be important for 4460 - 4600 to hold on any pullback.
DWCPF (S-fund) has also been churning sideways. I don't like that it closed well off its highs for 3+ straight days, but so far the chart is holding firmly above key levels. I'll be curious to see if the small caps get some attention if the large caps dip on the Intel earnings today.
EFA (I-fund) was up modestly despite a rally in the dollar, so that showed some strength in the overseas markets. There's a lot going on in the chart and it isn't clear which way it wants to go, but as along as it remains above the 20-day EMA, and even the 50-day EMA, I have to give the bulls the nod here.
BND (F-fund) was up nicely and remained in the bullish looking flag. It fell a couple of pennies short of getting back above its 20-day EMA, but as of now this looks fine. A favorable PCE report could help push it to the top of the flag as the chart is suggesting the news could be good.
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
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.
