Stocks were higher yesterday with green across the board during a quiet, light volume trading day. The Dow gained just 10 points but the small caps just keep zigging and zagging in fairly large chunks as the Russell 2000 gains almost 2% yesterday. The S-fund was up about 1.4% after Tuesday's sell off. The S&P was up slightly and the Nasdaq added a modest gain to Tuesday's big rally. Bonds were flat, and the dollar was up sharply.
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The advancing issues were up about 2 to 1 over decliners on the NYSE so it was a solid bullish day, and with the light trading volume again, perhaps we can dismiss it as pre-holiday action despite the fact that the historically, stocks have tended to struggle some during the week before Memorial Day weekend.
Looking more at seasonality, here's what happened in June over the last four years. One common thread was that the month started rather well in all four, except for 2019 when the first trading day in June was down sharply, but it went straight up from there. Unfortunately the S&P 500 didn't always hold those early June gains as you can see - again except for 2019.
Since that pattern seemed quite consistent, I went back a couple of more years and I saw that in both 2015 and 2016 there was a sharp sell off in each of those two Junes.
So there doesn't seem to be a big advantage via the seasonality charts, but it looks like the odds are that the start of the month could be on the bullish side. Although, you know what we always say about patterns... one you recognize one, it's probably about to end.
Yesterday, and all this week for that matter, those short squeeze stocks have been doing very well again with GameStop and AMC, and others like that, having huge gains. Last time that happened the market started to act a little flaky. Perhaps the bitcoin bandits were getting a little bored with that decline and needed more action. We'll see if this can continue and what comes of it, but just keep that in the back of your mind.
From www.tsp.gov: Holiday Closing
Some financial markets will be closed on Monday, May 31 in observance of the Memorial Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (May 31) will be processed Tuesday night (June 1), at Tuesday's closing share prices.
The S&P 500 (C-fund) broke down in early May from the rising trading channel. Since then it has pulled back twice, and both times it found support at the reliable 50-day EMA. That looks like a "W" bottom for now, but until recently, the action has been a little volatile and the question for next week - or perhaps to end this week, is if it can make a new high or are we going to see a double top pullback?
The DWCPF (S-fund) has been all over the map in May and had been the worst performing fund for the month, but yesterday' rally helped. It has been in a range for months now with 2260 being the top, and about 2020 being the low. It's back over the 50-day EMA but it has been going back and forth for the last four days. I still see a possible bear flag but the longer it holds without breaking down, the less bearish it becomes. Another fall below the 50-day EMA could break the bear flag down, so that could be the line in the sand.
The EFA / I-fund was down slightly yesterday but we know how the TSP's price they give can lag the EFA because of the overnight trading and they have to decide whether to take the U.S. action into consideration for that day's share price. The chart looks good but it is a lot closer to the top of its trading channel., than the bottom.
The Dow Transportation Index popped almost 1% yesterday after shedding the same amount the day before. The channel is broken but it has been hanging around rather than breaking down yet. It's tough to get a read with all of these back and forth days but, if some of you remember Trader Fred who used to have a service here used to say, when there's a series of 1% moves in an index, it's usually best to step aside.
BND (F-fund) inched closer to the 200-day EMA yesterday, something it has traded below since the gap down back in February. Perhaps it wants to fill that gap, but it has been baffling to me why this has rallied for more than two months since the March 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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The advancing issues were up about 2 to 1 over decliners on the NYSE so it was a solid bullish day, and with the light trading volume again, perhaps we can dismiss it as pre-holiday action despite the fact that the historically, stocks have tended to struggle some during the week before Memorial Day weekend.
Looking more at seasonality, here's what happened in June over the last four years. One common thread was that the month started rather well in all four, except for 2019 when the first trading day in June was down sharply, but it went straight up from there. Unfortunately the S&P 500 didn't always hold those early June gains as you can see - again except for 2019.
Since that pattern seemed quite consistent, I went back a couple of more years and I saw that in both 2015 and 2016 there was a sharp sell off in each of those two Junes.
So there doesn't seem to be a big advantage via the seasonality charts, but it looks like the odds are that the start of the month could be on the bullish side. Although, you know what we always say about patterns... one you recognize one, it's probably about to end.
Yesterday, and all this week for that matter, those short squeeze stocks have been doing very well again with GameStop and AMC, and others like that, having huge gains. Last time that happened the market started to act a little flaky. Perhaps the bitcoin bandits were getting a little bored with that decline and needed more action. We'll see if this can continue and what comes of it, but just keep that in the back of your mind.
From www.tsp.gov: Holiday Closing
Some financial markets will be closed on Monday, May 31 in observance of the Memorial Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (May 31) will be processed Tuesday night (June 1), at Tuesday's closing share prices.
The S&P 500 (C-fund) broke down in early May from the rising trading channel. Since then it has pulled back twice, and both times it found support at the reliable 50-day EMA. That looks like a "W" bottom for now, but until recently, the action has been a little volatile and the question for next week - or perhaps to end this week, is if it can make a new high or are we going to see a double top pullback?
The DWCPF (S-fund) has been all over the map in May and had been the worst performing fund for the month, but yesterday' rally helped. It has been in a range for months now with 2260 being the top, and about 2020 being the low. It's back over the 50-day EMA but it has been going back and forth for the last four days. I still see a possible bear flag but the longer it holds without breaking down, the less bearish it becomes. Another fall below the 50-day EMA could break the bear flag down, so that could be the line in the sand.
The EFA / I-fund was down slightly yesterday but we know how the TSP's price they give can lag the EFA because of the overnight trading and they have to decide whether to take the U.S. action into consideration for that day's share price. The chart looks good but it is a lot closer to the top of its trading channel., than the bottom.
The Dow Transportation Index popped almost 1% yesterday after shedding the same amount the day before. The channel is broken but it has been hanging around rather than breaking down yet. It's tough to get a read with all of these back and forth days but, if some of you remember Trader Fred who used to have a service here used to say, when there's a series of 1% moves in an index, it's usually best to step aside.
BND (F-fund) inched closer to the 200-day EMA yesterday, something it has traded below since the gap down back in February. Perhaps it wants to fill that gap, but it has been baffling to me why this has rallied for more than two months since the March 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.
