Stocks were mixed on Friday but a bit of a disappointment after the strong start to the day. The Dow gained 124-points, but it peaked right at the opening bell when it was up more than 200 points higher. The Russell 2000 small cap index was up, as was the S-fund, and the I-fund was given a nice gain, but most of the other indices were down on the day after some decent early gains. Bonds and the dollar were up.
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If you want to give the bull market the benefit of the doubt, it was an options / futures expiration Friday so that could have had something to do with the interesting reversing action, and perhaps that will reverse back this week. We'll see. It's also a pre-holiday weekend week so it is also possible that we get some kind of reversal from the trend, although it has been so choppy recently that's its tough to say what the prevailing short term trend is.
This is an interesting time for investors as it has been more about being in the right fund, rather than getting what we normally see which is all stocks rising or falling, but perhaps just at different degrees. If we look at the charts over the last couple of months we see very different developments.
If I was only worried about the S&P 500 I would be a lot more bullish than if I was looking at the chart of the S-fund. The I-fund chart also looks very good, but the Nasdaq leaves a lot to be desired.
We've seen bitcoin rollover and crash, falling more than 50% off it highs, while gold has been perking up a breaking out of a long term down trend recently. Some recent hot stocks like Tesla are down 55% or more from their 2021 highs, and others like Google are up 35% this year.
So this may not be the type of market where they used to say you can throw a dart at the stock quotes in the newspaper and probably pick a winner. I'm showing my age there as we don't want to be throwing darts at our monitors or smart phones.
2021 has been a good year so far but going forward choosing the right fund or whether to use cash (G-fund) or bonds (F-fund) in your portfolio, could make a big difference in your final 2021 return.
Admin note: I have had several requests over the years to create a service that will let you know when certain AutoTracker users are making a transaction (excluding premium members). It sounded like a good idea but logistically I wasn't sure how I could make it work. I would have had to automate something to generate emails when the IFT's were entered in the AutoTracker, and that could be a problem.
Between the forum and some premium service automated notifications (not IFT alerts), we send a lot of emails and unfortunately we've been tagged by some email services as potential spammers and some people have difficult time receiving these automated computer generated emails. If I didn't automate it, it would have to be done manually, and right about the time where I am watching the market and getting any IFT alerts ready for the premium services, so I just wouldn't have the time to put it together and deliver it in time for anyone to use the information to help make their decisions.
That's where TommyIV (Weekly Wrap Up) comes in. I recently spent some time with TommyIV and we may have come up with a way to do this. We're working on the logistics and may have come up with something. The email would not only include member IFTs for that day, but important headlines, economic data and more, all before the IFT deadline.
It would likely be sent via a third party email service like Constant Contact, similar to the way we send the IFT alerts now which are more successful at getting delivered.
It would not be a free service because of the time and effort it will take to put this information together and delivered each morning, but it will be a nominal, very reasonable price.
I'll let you know when it is available and we'll likely do some kind of free trial period so you can check it out before deciding. We have a basic idea of what we want to do, but at this point I'd be open to suggestions on what you might like to see included:
Email us at
,
,or both.
The S&P 500 (C-fund) did officially fill the open gap from May 11th on Friday, right before it started to back off from its highs. It ended the day with a small loss, but the fall from the highs was somewhat concerning. It remains above the 20 and 50-day EMAs so we can't get too bearish yet, but the negative reversal on Friday may be a bad omen, and there is an open gap below 4125 that does need filled, so that's a good possibility this week.
The DWCPF (S-fund) failed at the 50-day EMA on Friday after an early push above it. The angle of the current bear flag could be too steep to qualify it as a flag, although it is not quite as steep as the low in late March. That flag (blue) was quite steep and turned into more of a "V" bottom instead. This one looks like it could go either way, but the bearish action at the 50-day EMA may suggest otherwise.
The EFA / I-fund has been holding up well, thanks to the continued weakness in the dollar. All recent gaps have been filled and I'm watching that 79.75 area as possible support. That's on top of a short term trading channel that it broke back above late last week.
The Dow Transportation Index seems to be struggling a bit after hitting and pulling back from that top resistance line in early May. Then, after breaking below one support line earlier this month, it failed after a move back up to it. Continuing the pattern it broke below another layer of support late last week and failed again after bouncing up to hit the broken support line.
The Russell 2000 small caps index failed to close above the 50-day EMA again on Friday, after failing earlier in the week. Like the S-fund chart above, this one also appears to be in a bear flag.
The Nasdaq is also failed at the 50-day EMA and the top of its bear flag. It doesn't look great but if it happens to move straight up from here I suppose we can dismiss the flag for a "W" type of low.
BND (F-fund) is also in a bear flag just below the 50-day EMA, just as we see on the small caps and the Nasdaq, yet all of them have the potential to break to the upside and negate the flag with a "W" low. We can only wait and see, but yields would have to fall for that to happen and the question is, why would yields fall in a growth environment?
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.
[TABLE="align: center"]
[TR]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[TD]
[/TD]
[TD="width: 362, align: center"]
[/TR]
[/TABLE]
If you want to give the bull market the benefit of the doubt, it was an options / futures expiration Friday so that could have had something to do with the interesting reversing action, and perhaps that will reverse back this week. We'll see. It's also a pre-holiday weekend week so it is also possible that we get some kind of reversal from the trend, although it has been so choppy recently that's its tough to say what the prevailing short term trend is.
This is an interesting time for investors as it has been more about being in the right fund, rather than getting what we normally see which is all stocks rising or falling, but perhaps just at different degrees. If we look at the charts over the last couple of months we see very different developments.
If I was only worried about the S&P 500 I would be a lot more bullish than if I was looking at the chart of the S-fund. The I-fund chart also looks very good, but the Nasdaq leaves a lot to be desired.
We've seen bitcoin rollover and crash, falling more than 50% off it highs, while gold has been perking up a breaking out of a long term down trend recently. Some recent hot stocks like Tesla are down 55% or more from their 2021 highs, and others like Google are up 35% this year.
So this may not be the type of market where they used to say you can throw a dart at the stock quotes in the newspaper and probably pick a winner. I'm showing my age there as we don't want to be throwing darts at our monitors or smart phones.
2021 has been a good year so far but going forward choosing the right fund or whether to use cash (G-fund) or bonds (F-fund) in your portfolio, could make a big difference in your final 2021 return.
Admin note: I have had several requests over the years to create a service that will let you know when certain AutoTracker users are making a transaction (excluding premium members). It sounded like a good idea but logistically I wasn't sure how I could make it work. I would have had to automate something to generate emails when the IFT's were entered in the AutoTracker, and that could be a problem.
Between the forum and some premium service automated notifications (not IFT alerts), we send a lot of emails and unfortunately we've been tagged by some email services as potential spammers and some people have difficult time receiving these automated computer generated emails. If I didn't automate it, it would have to be done manually, and right about the time where I am watching the market and getting any IFT alerts ready for the premium services, so I just wouldn't have the time to put it together and deliver it in time for anyone to use the information to help make their decisions.
That's where TommyIV (Weekly Wrap Up) comes in. I recently spent some time with TommyIV and we may have come up with a way to do this. We're working on the logistics and may have come up with something. The email would not only include member IFTs for that day, but important headlines, economic data and more, all before the IFT deadline.
It would likely be sent via a third party email service like Constant Contact, similar to the way we send the IFT alerts now which are more successful at getting delivered.
It would not be a free service because of the time and effort it will take to put this information together and delivered each morning, but it will be a nominal, very reasonable price.
I'll let you know when it is available and we'll likely do some kind of free trial period so you can check it out before deciding. We have a basic idea of what we want to do, but at this point I'd be open to suggestions on what you might like to see included:
Email us at
The S&P 500 (C-fund) did officially fill the open gap from May 11th on Friday, right before it started to back off from its highs. It ended the day with a small loss, but the fall from the highs was somewhat concerning. It remains above the 20 and 50-day EMAs so we can't get too bearish yet, but the negative reversal on Friday may be a bad omen, and there is an open gap below 4125 that does need filled, so that's a good possibility this week.
The DWCPF (S-fund) failed at the 50-day EMA on Friday after an early push above it. The angle of the current bear flag could be too steep to qualify it as a flag, although it is not quite as steep as the low in late March. That flag (blue) was quite steep and turned into more of a "V" bottom instead. This one looks like it could go either way, but the bearish action at the 50-day EMA may suggest otherwise.
The EFA / I-fund has been holding up well, thanks to the continued weakness in the dollar. All recent gaps have been filled and I'm watching that 79.75 area as possible support. That's on top of a short term trading channel that it broke back above late last week.
The Dow Transportation Index seems to be struggling a bit after hitting and pulling back from that top resistance line in early May. Then, after breaking below one support line earlier this month, it failed after a move back up to it. Continuing the pattern it broke below another layer of support late last week and failed again after bouncing up to hit the broken support line.
The Russell 2000 small caps index failed to close above the 50-day EMA again on Friday, after failing earlier in the week. Like the S-fund chart above, this one also appears to be in a bear flag.
The Nasdaq is also failed at the 50-day EMA and the top of its bear flag. It doesn't look great but if it happens to move straight up from here I suppose we can dismiss the flag for a "W" type of low.
BND (F-fund) is also in a bear flag just below the 50-day EMA, just as we see on the small caps and the Nasdaq, yet all of them have the potential to break to the upside and negate the flag with a "W" low. We can only wait and see, but yields would have to fall for that to happen and the question is, why would yields fall in a growth environment?
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.
