Stocks were down yesterday with the Dow giving back Tuesday's gains with its 105-point loss on Wednesday. Several indices made new intraday all-time highs in early trading but the indices came off those levels quickly and drifted lower most of the day. Small caps lagged the large caps for a change, but the Nasdaq was the big loser, falling about 2%, but it's still just off all-time highs. A late afternoon push higher did take the indices off their lows.
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The House of Representatives passed a one week funding bill to keep the government open until a week from Saturday, and the bill now moves onto the Senate. They are using that to give them more time to work on a broader deal, in addition to a coronavirus stimulus package. That may have been some of the concerns for stocks yesterday, which have been counting on, and pricing in, some sort of relief package for months.
Internally the numbers were actually better than the indices might indicate, with more stocks advancing on the NYSE than declining, and share volume was just lightly negative. The Nasdaq was a little more negative with two stocks down for each positive, and declining volume similarly 2 to 1 over advancing volume.
This has been a quiet news week so this morning's initial and continuous jobless claims reports could be a highlight. The estimates are looking for 720,000 new claims for the week, which is slightly higher than last week's 712,000, so it could be moving in the wrong direction.
Tesla's stock dropped 7% yesterday after a dramatic run higher all year, and some are wondering if this is the signal that momentum may be ready to slow in the market, if one of this year's biggest gainers takes a pause.
I know it's a sensitive subject here, but seventeen states have joined the Texas lawsuit to sue four states over voting irregularities. These are similar suits to what we saw in 2000 in the Bush / Gore election. I mention it here because it could be a market mover -- maybe not. I'm not sure, but the Supreme Court has officially put the lawsuit on the docket, so it will be heard fairly soon.
The S&P 500 (C-fund) fell sharply yesterday but just about the time that it hit the lows of the day near that 3675 area we mentioned in yesterday's commentary, the bulls showed up and took the index about 12 points off the lows by the close. That is still a key level with little support below.
The DWCPF Index / S-fund also fell to an important support level after breaking below that narrow channel (blue), but that was clearly unsustainable. Parabolic rallies do tend to pay the price eventually, but they can be tough to time exactly when they will peak.
The Transportation Index was actually up yesterday and broke out to another new high. It has been rising up along its support line but it is still clinging to it so it remains vulnerable to a breakdown, and the 50-day EMA is 800-points below the current level.
The EFA / I-fund remains in the "F" flag. I have said this often recently - F flags tend to break down eventually, but they can remain in that flag for a long time before it does break, as we've seen. So, it's the same story, and those open gaps below aren't going away.
BND (Bonds / F-fund) tested the 50-day EMA again, a third time in the last six trading sessions I mentioned the bull flag yesterday but the angle of that flag is a little steep potentially making it more of a peak. If the 50-day EMA fails to hold then we may have our answer - it wouldn't be a bull flag.
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
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 House of Representatives passed a one week funding bill to keep the government open until a week from Saturday, and the bill now moves onto the Senate. They are using that to give them more time to work on a broader deal, in addition to a coronavirus stimulus package. That may have been some of the concerns for stocks yesterday, which have been counting on, and pricing in, some sort of relief package for months.
Internally the numbers were actually better than the indices might indicate, with more stocks advancing on the NYSE than declining, and share volume was just lightly negative. The Nasdaq was a little more negative with two stocks down for each positive, and declining volume similarly 2 to 1 over advancing volume.
This has been a quiet news week so this morning's initial and continuous jobless claims reports could be a highlight. The estimates are looking for 720,000 new claims for the week, which is slightly higher than last week's 712,000, so it could be moving in the wrong direction.
Tesla's stock dropped 7% yesterday after a dramatic run higher all year, and some are wondering if this is the signal that momentum may be ready to slow in the market, if one of this year's biggest gainers takes a pause.
I know it's a sensitive subject here, but seventeen states have joined the Texas lawsuit to sue four states over voting irregularities. These are similar suits to what we saw in 2000 in the Bush / Gore election. I mention it here because it could be a market mover -- maybe not. I'm not sure, but the Supreme Court has officially put the lawsuit on the docket, so it will be heard fairly soon.
The S&P 500 (C-fund) fell sharply yesterday but just about the time that it hit the lows of the day near that 3675 area we mentioned in yesterday's commentary, the bulls showed up and took the index about 12 points off the lows by the close. That is still a key level with little support below.
The DWCPF Index / S-fund also fell to an important support level after breaking below that narrow channel (blue), but that was clearly unsustainable. Parabolic rallies do tend to pay the price eventually, but they can be tough to time exactly when they will peak.
The Transportation Index was actually up yesterday and broke out to another new high. It has been rising up along its support line but it is still clinging to it so it remains vulnerable to a breakdown, and the 50-day EMA is 800-points below the current level.
The EFA / I-fund remains in the "F" flag. I have said this often recently - F flags tend to break down eventually, but they can remain in that flag for a long time before it does break, as we've seen. So, it's the same story, and those open gaps below aren't going away.
BND (Bonds / F-fund) tested the 50-day EMA again, a third time in the last six trading sessions I mentioned the bull flag yesterday but the angle of that flag is a little steep potentially making it more of a peak. If the 50-day EMA fails to hold then we may have our answer - it wouldn't be a bull flag.
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
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.
