Stocks resumed their corrective action as rallies continue to be sold, although we saw both buying of an extreme dip yesterday along with selling of strength. That created a spinning top formation on some of the charts indicating indecision on the part of investors. The Dow did lose 172-points, off the 400+ points it was down earlier. Meanwhile small caps gave up a big early gain to close down sharply. The dollar was up and bonds were down again, testing their recent lows.
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The S&P 500 (C-fund) did close off its lows of the day, but that was still below the 200-day EMA. This looks like a breakdown and right now the only question is whether or not it needs to test the January low? It doesn't have to, but that's pretty common, and nothing says we don't put in a lower low. If you were expecting a 20% decline this year, there's a long way to go before that gets hit.
The DWCPF (small caps / S-fund) was up early but another push back from moving averages, this one the 20-day EMA. Whenever the faster moving averages are below the slower ones, you are in a bearish market. Right now the 20 is below the 50-day. And the 50-day is below the 200-day. All of which are acting as resistance.
The EFA (I-fund) was down but it bounced off the December low, if that has some meaning. Perhaps it is the neckline of a big head and shoulders pattern, which would not be good.
BND (Bonds / F-fund) was down again and so Friday's big rally was taken back already.
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
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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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It felt like stocks wanted to rally yesterday but the headlines and anticipation of the events at the Ukraine border seem to be keeping a thumb on the market. We saw the price of oil shoot up another 2.5% to close above $95 barrel for the first time in many years. That's gotten concerning and of course new highs in gasoline prices won't be too far behind.
The yield on the 10-year Treasury bounced back from Friday's decline to close just shy of 2% again.
The dollar was up nicely, for whatever reason, and that reason could just be some technical cleaning up as another open gap got filled. Those are the blue boxes. There is still a minor open gap up near 26, and yesterday's rally actually opened a small gap down near Friday's highs.
The dollars strength did not deter gold from moving up as this hedge on inflation finally made a move out of a long consolidation. There was a fake out on the downside back in September, but here it is moving out of that pennant formation. It's only been two days so we'll see if this can confirm the move with a 3 to 5 day close above that resistance, or if it's another fake out.
Despite yesterday's small gain, the Nasdaq 100 may be winning the race to reach the prior lows. That's what we expected to happen, so will the S&P 500 and the small caps follow along?
We get the PPI Report (Producer Price Index) this morning and perhaps that could be a market mover, but after the disappointing CPI, expectations may already be low, so it may be tough to see a reading that would surprise us on the downside. It would have to be really bad.
The yield on the 10-year Treasury bounced back from Friday's decline to close just shy of 2% again.
The dollar was up nicely, for whatever reason, and that reason could just be some technical cleaning up as another open gap got filled. Those are the blue boxes. There is still a minor open gap up near 26, and yesterday's rally actually opened a small gap down near Friday's highs.
The dollars strength did not deter gold from moving up as this hedge on inflation finally made a move out of a long consolidation. There was a fake out on the downside back in September, but here it is moving out of that pennant formation. It's only been two days so we'll see if this can confirm the move with a 3 to 5 day close above that resistance, or if it's another fake out.
Despite yesterday's small gain, the Nasdaq 100 may be winning the race to reach the prior lows. That's what we expected to happen, so will the S&P 500 and the small caps follow along?
We get the PPI Report (Producer Price Index) this morning and perhaps that could be a market mover, but after the disappointing CPI, expectations may already be low, so it may be tough to see a reading that would surprise us on the downside. It would have to be really bad.
The S&P 500 (C-fund) did close off its lows of the day, but that was still below the 200-day EMA. This looks like a breakdown and right now the only question is whether or not it needs to test the January low? It doesn't have to, but that's pretty common, and nothing says we don't put in a lower low. If you were expecting a 20% decline this year, there's a long way to go before that gets hit.
The DWCPF (small caps / S-fund) was up early but another push back from moving averages, this one the 20-day EMA. Whenever the faster moving averages are below the slower ones, you are in a bearish market. Right now the 20 is below the 50-day. And the 50-day is below the 200-day. All of which are acting as resistance.
The EFA (I-fund) was down but it bounced off the December low, if that has some meaning. Perhaps it is the neckline of a big head and shoulders pattern, which would not be good.
BND (Bonds / F-fund) was down again and so Friday's big rally was taken back already.
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.
