Stocks started the shortened holiday week with some mixed, but mostly negative results. The Nasdaq was the lone winner as investors moved money into the FAANG type of stocks again, as if it has become a reflexive, defensive position. The Dow lost 269-points, and small caps lagged with the S-fund giving up nearly 1%. Yield rallied so bonds and the F-fund were down, and commodities were slammed as the dollar bounces back. The I-fund was up despite strength in the dollar - thanks to Japan?
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The dollar rallied on Tuesday, and of course that puts a lot of pressure on prices. Closing above the 50-day average could be meaningful in that it makes the next level of resistance all the way up to the top of the open gap near 25.10.
The yield on the 10-year also rallied - breaking above some resistance so this could be the start of something new for bonds. Bond prices fall when yields are rallying. There have been a lot of people waiting for yields to finally bounce back with the economy which is supposed to be growing, and this is the first significant technical move in a while. Translation, be careful in the F-fund.
Internally it was fairly negative but you can see that the Nasdaq volume breadth was positive with big tech getting most of the attention while nearly twice as many stocks were down on the Nasdaq Composite than up.
It was just day one after the long holiday weekend, and it did have a negative seasonal record, but that starts to get a little more bullish toward the end of the week, although overall September can be a struggle.
Admin Note: It's time for our annual NFL Survivor Pool. It's free and anyone can join. The games start on Thursday of this week, but the deadline to join is Sunday the 12th before the first game. Go here for more info: [url]https://www.tsptalk.com/mb/site-news-and-announcements/37405-nfl-last-man-standing-2021-a.html
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The S&P 500 (C-fund) dropped modestly on Tuesday, but this time if fell back into the trading channel that it tried to escape from last week. The reason that is significant is it is back below the old resistance line which failed to act as support, and that means there's a decent chance that the open gap near 4450 could be filled. There's nothing wrong with this chart except that it needs a rest.
The DWCPF (S-fund) was the loser yesterday falling nearly 1% on the day and it closed back below the June high. It has really only closed above that level twice before closing below it again yesterday, so it's not a stretch to call this a failed breakout at this point.
The EFA (EAFE Index / I-fund) surprised me with a gain yesterday but with the dollar up a half of a percent, I would not have believed this would have closed in positive territory. But the I-fund has had some help from Japan recently.
Remember how poorly the Japanese Nikkei had been doing, and I was saying that I thought Japan was weighing on the fund? Well, things reversed in September, and being about 25% of the I-fund, look what has happened in recent days.
The BND (bonds / F-fund) was down sharply with those yields rallying. It closed just below the 50-day EMA for only the second time since mid-May.
The Dow Transportation Index is back down testing the 100-day average after yesterday's 0.69% loss. This chart looks to be more bullish than bearish as it consolidates, but because this consolidation is on the tail end of a downtrend, it's possible that it could break down like a bear flag.
I wanted to show what happened to commodity prices after a day when the dollar rallies a half of a percent. Oil, gold, silver, copper, lumber, all down sharply yesterday.
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 dollar rallied on Tuesday, and of course that puts a lot of pressure on prices. Closing above the 50-day average could be meaningful in that it makes the next level of resistance all the way up to the top of the open gap near 25.10.
The yield on the 10-year also rallied - breaking above some resistance so this could be the start of something new for bonds. Bond prices fall when yields are rallying. There have been a lot of people waiting for yields to finally bounce back with the economy which is supposed to be growing, and this is the first significant technical move in a while. Translation, be careful in the F-fund.
Internally it was fairly negative but you can see that the Nasdaq volume breadth was positive with big tech getting most of the attention while nearly twice as many stocks were down on the Nasdaq Composite than up.
It was just day one after the long holiday weekend, and it did have a negative seasonal record, but that starts to get a little more bullish toward the end of the week, although overall September can be a struggle.
Admin Note: It's time for our annual NFL Survivor Pool. It's free and anyone can join. The games start on Thursday of this week, but the deadline to join is Sunday the 12th before the first game. Go here for more info: [url]https://www.tsptalk.com/mb/site-news-and-announcements/37405-nfl-last-man-standing-2021-a.html
[/URL]
The S&P 500 (C-fund) dropped modestly on Tuesday, but this time if fell back into the trading channel that it tried to escape from last week. The reason that is significant is it is back below the old resistance line which failed to act as support, and that means there's a decent chance that the open gap near 4450 could be filled. There's nothing wrong with this chart except that it needs a rest.
The DWCPF (S-fund) was the loser yesterday falling nearly 1% on the day and it closed back below the June high. It has really only closed above that level twice before closing below it again yesterday, so it's not a stretch to call this a failed breakout at this point.
The EFA (EAFE Index / I-fund) surprised me with a gain yesterday but with the dollar up a half of a percent, I would not have believed this would have closed in positive territory. But the I-fund has had some help from Japan recently.
Remember how poorly the Japanese Nikkei had been doing, and I was saying that I thought Japan was weighing on the fund? Well, things reversed in September, and being about 25% of the I-fund, look what has happened in recent days.
The BND (bonds / F-fund) was down sharply with those yields rallying. It closed just below the 50-day EMA for only the second time since mid-May.
The Dow Transportation Index is back down testing the 100-day average after yesterday's 0.69% loss. This chart looks to be more bullish than bearish as it consolidates, but because this consolidation is on the tail end of a downtrend, it's possible that it could break down like a bear flag.
I wanted to show what happened to commodity prices after a day when the dollar rallies a half of a percent. Oil, gold, silver, copper, lumber, all down sharply yesterday.
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.
