It wasn't a blockbuster move and the gain was in jeopardy up until the last minute or two of the trading session, but the S&P 500 was able to make it 11 positive Mondays in a row*, which goes back to July 3. The Dow and Nasdaq also saw tiny gains but in reality it was a very flat day of trading, unless you look at the small caps and the I-fund where the selling continued. Bonds were up slightly with yields mixed.
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* We actually had a down Tuesday after the Monday holiday on September 4 so not every week started with a gain -- just 11 of 12. :^) It's probably meaningless but worth mentioning since it fairly unusual.
Even with that streak, several charts are looking very vulnerable, while some of the larger cap indices continue to hang in there, so it is a matter of which leads which. Will the large caps hang in there long enough to pull up the lagging indices, or will those smaller cap indices and the Transportation Index drag the entire market down with them?
I continue to bring up the Russell 2000 small caps index which is really hanging on by a couple of threads, one being the 200-day moving average. The head and shoulders pattern (blue) has finished forming the right shoulder, and for good measure, or should I say bad, there is a smaller head and shoulders pattern formed inside that larger right shoulder. As I have mentioned several times, sometimes the head and shoulders patterns hold in an uptrend, which this is technically still in, but you would think that the open gap near 175 is going to try to lure it down to fill it at some point.
The longer term chart of the Russell 2000 also shows another potential downside target should the current level break down. There is an outside chance that the 200-day MA will hold since it has been an influential average for a while now on this chart.
As goes Apple -- Apple was up big at one point yesterday but it backed off from its high after approaching the 20-day EMA, however it did close with a nice gain of 1.7% . This chart has been filling gaps and creating head and shoulders pattern as if we were writing a technical analysis book. Open gaps got filled while it created a head and shoulders pattern and it is now attempting to fill that open gap (red) above 180, which could fill in the right shoulder. This doesn't look great and 172.50 has to hold or I believe the large cap indices could start to look more like the weak small cap charts.
The 10-year Treasury yield hit a double top yesterday and remains in a clear uptrend, although the double top "could" see at least a typical double top dip in the short term, but with the Fed FOMC meeting tomorrow, I doubt some technical analysis tendencies will stop this from going where it wants to go - whichever way that ends up being.
The market had an opportunity to see some relief yesterday after the fishy Friday expiration sell off, but it didn't and that's a little concerning. If the S&P 500 was up 25 points yesterday instead of 3, which would have gotten back half of Friday's losses, I still might be a little concerned about it being a short term dead cat bounce, so the 3-point move was really poor action. The bulls need to step up, and perhaps the Fed will give them a reason to do so on Wednesday, but if not, we could start seeing some of those head and shoulder patterns break down.
The S&P 500 (C-fund) was flat after failing yesterday at the 20-day EMA (green), but holding again at the 50-day EMA (purple.) Technical analysis would suggest that the pennant formation coming off the May to late July rally would be a bullish formation that would tend to break upward, but as I have been saying, other indices may not be confirming that kind of action, although perhaps we should be open to it. Maybe that doesn't happen this week or this month as it could continue to move sideways within the pennant for a while longer.
DWCPF (S-fund) looks only slightly better than that vulnerable IWM / Russell 2000 chart I posted up above, but there are still a couple of levels of support below it to try to hold it up. Technically this is still in a longer-term uptrend, which gives the head and shoulders pattern, and pennant, a modest bullish advantage, but it is hanging by a thread at this point.
EFA (I-fund) was down but it closed near the highs of the day, and the reversal came after it filled in the open gap from last Thursday. Like the small caps and the Transportation Index, this looks vulnerable but it's not dead yet.
BND (Bonds / F-fund) was up with yields mixed as shorter term bond yields were up, and the longer term (10 and 30 year) were down. Yet another head and shoulders pattern with an open gap below it. Is someone trying to tell us something?
Thanks so much for reading! We'll see you back here tomorrow.
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
Daily Market Commentary Archives
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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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* We actually had a down Tuesday after the Monday holiday on September 4 so not every week started with a gain -- just 11 of 12. :^) It's probably meaningless but worth mentioning since it fairly unusual.
Even with that streak, several charts are looking very vulnerable, while some of the larger cap indices continue to hang in there, so it is a matter of which leads which. Will the large caps hang in there long enough to pull up the lagging indices, or will those smaller cap indices and the Transportation Index drag the entire market down with them?
I continue to bring up the Russell 2000 small caps index which is really hanging on by a couple of threads, one being the 200-day moving average. The head and shoulders pattern (blue) has finished forming the right shoulder, and for good measure, or should I say bad, there is a smaller head and shoulders pattern formed inside that larger right shoulder. As I have mentioned several times, sometimes the head and shoulders patterns hold in an uptrend, which this is technically still in, but you would think that the open gap near 175 is going to try to lure it down to fill it at some point.
The longer term chart of the Russell 2000 also shows another potential downside target should the current level break down. There is an outside chance that the 200-day MA will hold since it has been an influential average for a while now on this chart.
As goes Apple -- Apple was up big at one point yesterday but it backed off from its high after approaching the 20-day EMA, however it did close with a nice gain of 1.7% . This chart has been filling gaps and creating head and shoulders pattern as if we were writing a technical analysis book. Open gaps got filled while it created a head and shoulders pattern and it is now attempting to fill that open gap (red) above 180, which could fill in the right shoulder. This doesn't look great and 172.50 has to hold or I believe the large cap indices could start to look more like the weak small cap charts.
The 10-year Treasury yield hit a double top yesterday and remains in a clear uptrend, although the double top "could" see at least a typical double top dip in the short term, but with the Fed FOMC meeting tomorrow, I doubt some technical analysis tendencies will stop this from going where it wants to go - whichever way that ends up being.
The market had an opportunity to see some relief yesterday after the fishy Friday expiration sell off, but it didn't and that's a little concerning. If the S&P 500 was up 25 points yesterday instead of 3, which would have gotten back half of Friday's losses, I still might be a little concerned about it being a short term dead cat bounce, so the 3-point move was really poor action. The bulls need to step up, and perhaps the Fed will give them a reason to do so on Wednesday, but if not, we could start seeing some of those head and shoulder patterns break down.
The S&P 500 (C-fund) was flat after failing yesterday at the 20-day EMA (green), but holding again at the 50-day EMA (purple.) Technical analysis would suggest that the pennant formation coming off the May to late July rally would be a bullish formation that would tend to break upward, but as I have been saying, other indices may not be confirming that kind of action, although perhaps we should be open to it. Maybe that doesn't happen this week or this month as it could continue to move sideways within the pennant for a while longer.
DWCPF (S-fund) looks only slightly better than that vulnerable IWM / Russell 2000 chart I posted up above, but there are still a couple of levels of support below it to try to hold it up. Technically this is still in a longer-term uptrend, which gives the head and shoulders pattern, and pennant, a modest bullish advantage, but it is hanging by a thread at this point.
EFA (I-fund) was down but it closed near the highs of the day, and the reversal came after it filled in the open gap from last Thursday. Like the small caps and the Transportation Index, this looks vulnerable but it's not dead yet.
BND (Bonds / F-fund) was up with yields mixed as shorter term bond yields were up, and the longer term (10 and 30 year) were down. Yet another head and shoulders pattern with an open gap below it. Is someone trying to tell us something?
Thanks so much for reading! We'll see you back here tomorrow.
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
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
Like what you're seeing on TSP Talk? Why not Tell a Friend about us? We'd really appreciate it, and they may too.
Thanks!
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.
