The Dow jumped another 300+ points to start April and the second quarter, but it was a little more mixed out there than the Dow suggested. Tech, the Transports, and small caps lagged on the day. The I-fund led the TSP funds with another decline in the dollar assisting. OPEC+ is cutting oil their supply so we are seeing oil prices move up again.
[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 first couple of days of a new month tends to have a bullish bias because of new money coming into the market, and the "new month, new direction" tendency may hold off during these first few days, if it is going to move in the new direction at all - it's just a tendency.
Healthcare and Energy related stocks were the catalysts for the big jump in the Dow but the broader action was more mixed with the Nasdaq losing ground including almost twice as much declining share volume as advancing. And, as you can see below, there were several indices posting losses on the day.
The 10-year Yield fell sharply and it now flirting with another breakdown from the bear flag, and below the 200-day EMA. Lower yields may get investors excited but it is most likely a result of weaker economic data. The Atlanta Fed just cut their 1st quarter GDP growth estimate to 1.7%, which is almost half of what it was just a week or so ago.
The dollar also fell closing at its lowest level since early February, giving prices a little lift along the way, especially that I-fund.
I mentioned the inverted 2/10 year yield curve yesterday and today I am showing a long-term monthly chart of the yield curve vs. the S&P 500 - highlighting the inverted periods. Notice that the S&P didn't necessarily decline when the yield curve was inverted, but rather it fell when the yield curve was steepening, or un-inverting - if you will, above the 0.00 line. That's what we have not seen yet and what would start happening if the Fed cuts interest rates.
Not much on the calendar until the second half of the month when first quarter earnings start to roll in, but on Friday we will get the March jobs report and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%, which would be no change from the prior month.
The S&P 500 (C-fund) wobbled early yesterday but it popped late at challenged the top of its rising trading channel again. It seems to be on its way to test the prior highs, but I still think this market is one bank headline away from reversing course. Barring that, the bulls have the momentum. The open gap still looms down by 3980.
The DWCPF (S-fund) was down after a big week last week. The bear flag is now all but a distant memory, although technically the 1680 - 1690 could be the ultimate test of the flag and the old descending resistance line.
The EFA (I-fund) had a big day with the dollar falling about a half of a percent. This is about to do a test of the February high and double tops tend to give us at least a short pause and pullback before going higher, but with the momentum the way it is, never say never. A double top pullback would certainly have some downside targets with all of those open gaps.
BND (bonds / F-fund) had another nice day yesterday and while lower yields could keep this buoyant, that resistance line could get in the way of this rally. Yesterday's action filled in that open gap (blue) from a week ago. And, as they tend to do, open gaps have us looking over or shoulder at the one down by 71.75.
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 so much 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.
[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 first couple of days of a new month tends to have a bullish bias because of new money coming into the market, and the "new month, new direction" tendency may hold off during these first few days, if it is going to move in the new direction at all - it's just a tendency.
Healthcare and Energy related stocks were the catalysts for the big jump in the Dow but the broader action was more mixed with the Nasdaq losing ground including almost twice as much declining share volume as advancing. And, as you can see below, there were several indices posting losses on the day.
The 10-year Yield fell sharply and it now flirting with another breakdown from the bear flag, and below the 200-day EMA. Lower yields may get investors excited but it is most likely a result of weaker economic data. The Atlanta Fed just cut their 1st quarter GDP growth estimate to 1.7%, which is almost half of what it was just a week or so ago.
The dollar also fell closing at its lowest level since early February, giving prices a little lift along the way, especially that I-fund.
I mentioned the inverted 2/10 year yield curve yesterday and today I am showing a long-term monthly chart of the yield curve vs. the S&P 500 - highlighting the inverted periods. Notice that the S&P didn't necessarily decline when the yield curve was inverted, but rather it fell when the yield curve was steepening, or un-inverting - if you will, above the 0.00 line. That's what we have not seen yet and what would start happening if the Fed cuts interest rates.
Not much on the calendar until the second half of the month when first quarter earnings start to roll in, but on Friday we will get the March jobs report and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%, which would be no change from the prior month.
The S&P 500 (C-fund) wobbled early yesterday but it popped late at challenged the top of its rising trading channel again. It seems to be on its way to test the prior highs, but I still think this market is one bank headline away from reversing course. Barring that, the bulls have the momentum. The open gap still looms down by 3980.
The DWCPF (S-fund) was down after a big week last week. The bear flag is now all but a distant memory, although technically the 1680 - 1690 could be the ultimate test of the flag and the old descending resistance line.
The EFA (I-fund) had a big day with the dollar falling about a half of a percent. This is about to do a test of the February high and double tops tend to give us at least a short pause and pullback before going higher, but with the momentum the way it is, never say never. A double top pullback would certainly have some downside targets with all of those open gaps.
BND (bonds / F-fund) had another nice day yesterday and while lower yields could keep this buoyant, that resistance line could get in the way of this rally. Yesterday's action filled in that open gap (blue) from a week ago. And, as they tend to do, open gaps have us looking over or shoulder at the one down by 71.75.
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 so much 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.
