The dollar was a headwind on Monday, and Monday tends to be the head fake during Thanksgiving week. The Dow lost 45-points yesterday but once again the Nasdaq lagged with a steeper 1% loss, and small caps weren't far behind. Yields were mostly flat keeping the F-fund fairly flat as well. The market leading Transportation Index was actually up on the day after a big positive reversal day last week.
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It should be a quiet week, although we will get the FOMC meeting minutes on Wednesday which could give us some volatility, but with Fed Governors on TV almost everyday, most people know what they've been thinking so a surprise in those minutes - would be a surprise.
Yields weren't much of an issue yesterday but the dollar seems to be doing a pre-holiday reversal off the recent lows. The 0.87% gain in UUP put pressure on stocks and commodities, although the price of oil turned a big early loss into a flat day after catching a bounce off a double bottom low.
As far as Thanksgiving week goes, Monday has historically been the mucky day, and while there's no guarantees, having traders and money managers taking some time off this week "should" be a nudge in favor of the bulls for the next few days. There's no guarantees obviously. If the chance of a gain is 65 or 70%, that means the chance of a loss is 30 - 35%.
Chart provided courtesy of www.sentimentrader.com
And here we are technically still in a bear market so I'd say we can ignore the chart above because of that, but I'll remind you with this chart below that I posted yesterday that we had one of the most bullish Thanksgiving trading weeks in decades during the depths of the 2008 bear market.
I'm not going to be doing much more analysis than that this week since trading volume will be light and the holiday action tends to defy trends and goes more with tendencies. We'll just take it for what it is. If you're looking to buy, you should probably use any weakness this week to buy. If you're looking to sell, you can use this week to sell into any strength. Just look at the rest of this week as a commercial while we look forward to next week when the show continues.
The S&P 500 (C-fund) continues to chop around between that 200-day EMA (dark blue) and 3900, which appears to be a significant level - whether as support or resistance, when tested, and it held last week. The recent pullback off of last week's peak could be a bull flag which, as the name suggests, tends to resolve on the bullish (up) side. But we saw a major failure of a bull flag back in June. The difference may have been that inflation news was coming out from the White House that day breakdown day in June, and the CPI report was due out the next day, while this week is a holiday week.
The DWCPF (small caps / S-fund) lagged both the large cap indices and the Russell 2000 small caps so it was the mid-caps that dragged it down. That may have had to do with the price of oil falling, but oil bounced back and while this index closed off its lows of the day, it didn't bounce back like oil did. There is some decent support below so it's time for the bulls to make a move or this chart could be in trouble if it falls below 1600.
The EFA (I-fund) was down but perhaps not as much as we might have expected with the dollar up 0.87%. With that, the fact that the EFA was only down 0.75% actually suggests some strength here. It fell back into the ascending channel but remains above some support, however there is a lot of room below if the current level can't hold.
BND (bonds / F-fund) was flat yesterday.
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 so much 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 should be a quiet week, although we will get the FOMC meeting minutes on Wednesday which could give us some volatility, but with Fed Governors on TV almost everyday, most people know what they've been thinking so a surprise in those minutes - would be a surprise.
Yields weren't much of an issue yesterday but the dollar seems to be doing a pre-holiday reversal off the recent lows. The 0.87% gain in UUP put pressure on stocks and commodities, although the price of oil turned a big early loss into a flat day after catching a bounce off a double bottom low.
As far as Thanksgiving week goes, Monday has historically been the mucky day, and while there's no guarantees, having traders and money managers taking some time off this week "should" be a nudge in favor of the bulls for the next few days. There's no guarantees obviously. If the chance of a gain is 65 or 70%, that means the chance of a loss is 30 - 35%.
Chart provided courtesy of www.sentimentrader.com
And here we are technically still in a bear market so I'd say we can ignore the chart above because of that, but I'll remind you with this chart below that I posted yesterday that we had one of the most bullish Thanksgiving trading weeks in decades during the depths of the 2008 bear market.
I'm not going to be doing much more analysis than that this week since trading volume will be light and the holiday action tends to defy trends and goes more with tendencies. We'll just take it for what it is. If you're looking to buy, you should probably use any weakness this week to buy. If you're looking to sell, you can use this week to sell into any strength. Just look at the rest of this week as a commercial while we look forward to next week when the show continues.
The S&P 500 (C-fund) continues to chop around between that 200-day EMA (dark blue) and 3900, which appears to be a significant level - whether as support or resistance, when tested, and it held last week. The recent pullback off of last week's peak could be a bull flag which, as the name suggests, tends to resolve on the bullish (up) side. But we saw a major failure of a bull flag back in June. The difference may have been that inflation news was coming out from the White House that day breakdown day in June, and the CPI report was due out the next day, while this week is a holiday week.
The DWCPF (small caps / S-fund) lagged both the large cap indices and the Russell 2000 small caps so it was the mid-caps that dragged it down. That may have had to do with the price of oil falling, but oil bounced back and while this index closed off its lows of the day, it didn't bounce back like oil did. There is some decent support below so it's time for the bulls to make a move or this chart could be in trouble if it falls below 1600.
The EFA (I-fund) was down but perhaps not as much as we might have expected with the dollar up 0.87%. With that, the fact that the EFA was only down 0.75% actually suggests some strength here. It fell back into the ascending channel but remains above some support, however there is a lot of room below if the current level can't hold.
BND (bonds / F-fund) was flat yesterday.
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 so much 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.
