Stocks bounced back from the Consumer / producer Price data inflation scare earlier in the week to post solid gains on Friday. The Dow gained 179-points for a gain of 0.50%, while the Nasdaq and small caps led with gains of 1% plus. The TSP share prices and fund returns below are accounting for the action from both Thursday and Friday, since the TSP did not post prices for Thursday's holiday.
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The S&P 500 (C-fund) turned around on Friday to get back a good part of the earlier weekly losses. We saw a breakdown from the near vertical angled rally off the October lows, but that wasn't going to last forever. Now the question is whether last week's high is going to be some kind of peak, or if new highs are coming. Support-wise, there isn't a whole lot below right now although last weeks low may produce some support since that was a place we're dip buyers were willing to jump in.
The weekly chart starts in the lower left corner and ends in the upper right, and that is hard to argue with. If there's a problem it is that we are not getting any pullbacks and the chart hasn't tested the 50-week EMA since July of 2020. There were a couple of near misses last fall, but you can see that it is more common, and some might say more healthy, for the market to climb up more slowly and pullback to form support along the way. Right now it is more than 500-points above that 50-week moving average.
The DWCPF (S-fund) found some support at a very clean area during last week's pullback. That really needs to hold or else those open gaps become a factor again. I hate to say the gaps are not a factor anymore, but if that old resistance line and rising support line (blue) continue to hold, then we won't need to talk about the gaps. But if they break down...
The EFA (I-fund) pulled back and broke below its rising trading channel last week after testing the previous peak. The recent strength in the dollar is not helping here.
BND (Bonds / F-fund) closed for a second straight day below the 200-day EMA, and three straight days below the 50-day EMA. It also fell below its recent rising support line. Higher yields and lower bond prices look to be in the cards, unless this can somehow recapture those technical red lines.
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 TSP Talk - Market Commentary
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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For the week, all three stock funds were down modestly, and bonds were also down.
The yield on the 10-year was up on Friday after the off day in the bond market on Thursday. The recent downtrend seems to have broken after the CPI and PPI reports last week.
The dollar made another new high early on Friday before settling back down to close slightly negative on the day. The trend is up but it is at the top of the channel with some room for a pullback.
The price of oil has been stalling after a double top pullback, which coincides with that recent spike in the dollar. There seems to be a battle going on between some solid support coming off the recent lows, and some old broken support that may be turning into resistance.
The action late last week seems to be indicating that the short pullback is over. That may be the case, but as we talked about last week, the holiday last week led to light volume trading on Thursday and Friday and we could be seeing pre / post holiday type market action, where we get a pre-holiday reversal to the downside, and a reversal up on Friday after the holiday. But being that volume was light, we may not know which way the market really wants to go until early this week.
Mondays also have a tendency to see emotional moves to start the day, then a reversal after, which is what we saw last Monday. That day we had a decent early gains fade to close closer to flat for a negative reversal pattern on the chart, and that led to a two day pullback in stocks on Tuesday and Wednesday.
We certainly have bullish action overall despite the modest pullback last week, but the charts are still very stretched, as are many indicators. If the bears are going to make a move, this may be their last week before the holiday bullish bias kicks in.
The yield on the 10-year was up on Friday after the off day in the bond market on Thursday. The recent downtrend seems to have broken after the CPI and PPI reports last week.
The dollar made another new high early on Friday before settling back down to close slightly negative on the day. The trend is up but it is at the top of the channel with some room for a pullback.
The price of oil has been stalling after a double top pullback, which coincides with that recent spike in the dollar. There seems to be a battle going on between some solid support coming off the recent lows, and some old broken support that may be turning into resistance.
The action late last week seems to be indicating that the short pullback is over. That may be the case, but as we talked about last week, the holiday last week led to light volume trading on Thursday and Friday and we could be seeing pre / post holiday type market action, where we get a pre-holiday reversal to the downside, and a reversal up on Friday after the holiday. But being that volume was light, we may not know which way the market really wants to go until early this week.
Mondays also have a tendency to see emotional moves to start the day, then a reversal after, which is what we saw last Monday. That day we had a decent early gains fade to close closer to flat for a negative reversal pattern on the chart, and that led to a two day pullback in stocks on Tuesday and Wednesday.
We certainly have bullish action overall despite the modest pullback last week, but the charts are still very stretched, as are many indicators. If the bears are going to make a move, this may be their last week before the holiday bullish bias kicks in.
The S&P 500 (C-fund) turned around on Friday to get back a good part of the earlier weekly losses. We saw a breakdown from the near vertical angled rally off the October lows, but that wasn't going to last forever. Now the question is whether last week's high is going to be some kind of peak, or if new highs are coming. Support-wise, there isn't a whole lot below right now although last weeks low may produce some support since that was a place we're dip buyers were willing to jump in.
The weekly chart starts in the lower left corner and ends in the upper right, and that is hard to argue with. If there's a problem it is that we are not getting any pullbacks and the chart hasn't tested the 50-week EMA since July of 2020. There were a couple of near misses last fall, but you can see that it is more common, and some might say more healthy, for the market to climb up more slowly and pullback to form support along the way. Right now it is more than 500-points above that 50-week moving average.
The DWCPF (S-fund) found some support at a very clean area during last week's pullback. That really needs to hold or else those open gaps become a factor again. I hate to say the gaps are not a factor anymore, but if that old resistance line and rising support line (blue) continue to hold, then we won't need to talk about the gaps. But if they break down...
The EFA (I-fund) pulled back and broke below its rising trading channel last week after testing the previous peak. The recent strength in the dollar is not helping here.
BND (Bonds / F-fund) closed for a second straight day below the 200-day EMA, and three straight days below the 50-day EMA. It also fell below its recent rising support line. Higher yields and lower bond prices look to be in the cards, unless this can somehow recapture those technical red lines.
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 TSP Talk - Market Commentary
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.
