Stocks were up modestly on Monday and the internals were fairly strong, but the large early gains failed at the recent highs and it was more of a disappointment for the bulls than a victory. The Dow was up 335-points at its high and closes up just 16, so the overly emotional Monday morning gap up was quickly filled, which can be a good thing, but it couldn't recapture that early excitement in the afternoon trading. We saw an even larger percentage gain in the S&P 500 fade, so the new week starts with some bullish skepticism. Bonds were down as the yield on the 10-year moved back over 3%.
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Investors will be anxiously awaiting Friday's CPI Report (Consumer Price Index), the next major indication of inflation, and that may influence investors as they position their account for this highly anticipated report. Remember when the CPI and PPI were less than market movers because it has been years and years since inflation has been an issue? Now they are the headliners.
The internals were fairly positive yesterday but those numbers flattened out as the rally faded. More new highs on the NYSE than new lows, but the Nasdaq new lows remain elevated.
The yield on the 10-year Treasury is back over 3%, and the market may not be overly comfortable with that since it is hoping for signs that the Fed will pause on rate hikes, and this development probably makes that less likely.
There are plenty of warning signs out there and we are in a bear market so while the market could go higher, the risks are getting higher as well. Oil is near $120 a barrel. The High Yield Bond market sold off yesterday, and that may be a bad sign for the credit market. And of course we've just had a big rally in a bear market. Are the bulls getting too greedy by expecting more?
I don't want to speculate too much with Friday's CPI on Friday. We could see some positioning from money managers in front of it that could push the indices around, but we may not find out what the next big move is until after that report on Friday. The charts have a lot of resistance on them and the bulls may need to step up their game if they want to push the indices through it. Perhaps a CPI report that eases investment fears could propel stocks higher, but it could also set up a "sell the news" reaction if expectations of peaking inflation get too high.
We have some informative discussions going on in the forum 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 us, 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 they have been several hours later - sometimes so late that I can't get to it until the following morning. Hopefully that is just temporary issue while they work on all of the other issues.
The S&P 500 (C-fund) remains in the bullish looking flag, but below the 50-day EMA as the sideways consolidation off the rally continued. We did see a bull flag fail and break down back in early March, which isn't the norm, but is happens. It's just a question of whether the bulls have the fortitude to move above resistance, and if they do, it may take a catalyst to get it there. Will that be Friday's CPI, or something in the interim? The negative reversal day yesterday could set up the fake out that I mentioned in yesterday's commentary.
The DWCPF (S-fund) was lagging early but caught up to the large caps to gain 1/3 of a percent, which was decent but also off its highs and that overhead resistance is thick and really showing its presence.
The EFA (I-fund) has been moving sideways and dancing above and below its 50-day average for days, but the sideways action has also knocked it below its recent rising trading channel. It's not all bad looking as that could be a bull flag, but how much more consolidating does it have to do after the 4-week rally that may need more digestion?
BND (bonds / F-fund) is back in bear market mode. We saw a good rally here and this is a good reminder that not all rallies lead to bull markets, but rather they make better selling opportunities. Next stop, a test of the lows?
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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[TR]
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[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Investors will be anxiously awaiting Friday's CPI Report (Consumer Price Index), the next major indication of inflation, and that may influence investors as they position their account for this highly anticipated report. Remember when the CPI and PPI were less than market movers because it has been years and years since inflation has been an issue? Now they are the headliners.
The internals were fairly positive yesterday but those numbers flattened out as the rally faded. More new highs on the NYSE than new lows, but the Nasdaq new lows remain elevated.
The yield on the 10-year Treasury is back over 3%, and the market may not be overly comfortable with that since it is hoping for signs that the Fed will pause on rate hikes, and this development probably makes that less likely.
There are plenty of warning signs out there and we are in a bear market so while the market could go higher, the risks are getting higher as well. Oil is near $120 a barrel. The High Yield Bond market sold off yesterday, and that may be a bad sign for the credit market. And of course we've just had a big rally in a bear market. Are the bulls getting too greedy by expecting more?
I don't want to speculate too much with Friday's CPI on Friday. We could see some positioning from money managers in front of it that could push the indices around, but we may not find out what the next big move is until after that report on Friday. The charts have a lot of resistance on them and the bulls may need to step up their game if they want to push the indices through it. Perhaps a CPI report that eases investment fears could propel stocks higher, but it could also set up a "sell the news" reaction if expectations of peaking inflation get too high.
We have some informative discussions going on in the forum 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 us, 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 they have been several hours later - sometimes so late that I can't get to it until the following morning. Hopefully that is just temporary issue while they work on all of the other issues.
The S&P 500 (C-fund) remains in the bullish looking flag, but below the 50-day EMA as the sideways consolidation off the rally continued. We did see a bull flag fail and break down back in early March, which isn't the norm, but is happens. It's just a question of whether the bulls have the fortitude to move above resistance, and if they do, it may take a catalyst to get it there. Will that be Friday's CPI, or something in the interim? The negative reversal day yesterday could set up the fake out that I mentioned in yesterday's commentary.
The DWCPF (S-fund) was lagging early but caught up to the large caps to gain 1/3 of a percent, which was decent but also off its highs and that overhead resistance is thick and really showing its presence.
The EFA (I-fund) has been moving sideways and dancing above and below its 50-day average for days, but the sideways action has also knocked it below its recent rising trading channel. It's not all bad looking as that could be a bull flag, but how much more consolidating does it have to do after the 4-week rally that may need more digestion?
BND (bonds / F-fund) is back in bear market mode. We saw a good rally here and this is a good reminder that not all rallies lead to bull markets, but rather they make better selling opportunities. Next stop, a test of the lows?
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.
