Stocks battled back from a weak open once again on Wednesday and, if you like watching paint dry, this is the market for you. There's an old adage that you shouldn't short (bet against) a dull market so the bulls seem to be in control. The Dow lost 80-points on the day while the other indices were mostly flat. Bond yields rallied pushing the F-fund down again, and the dollar was up putting pressure on the I-fund.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[/TD]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The only thing more difficult to write about than a market that is moving against you, is a market that isn't moving. I don't have much to add to my recent analysis since little has changed. Even earnings releases have been uneventful so far. That could change as the reporting names get bigger next week, but for now, here's what I'm seeing.
The Yield on the 10-year Treasury was up but closed off its highs after finding resistance at the high from March 22. The 2-year T-Note Yield (not shown), was up even more to 4.25%, widening the yield curve between the two. More signs of a possible recession without too much more to back that up yet.
Those regional banks were up sharply yesterday and I would have expected that to help out the small cap indices yesterday, but the 3.94% gain in KRE dwarfed the returns of the Russell 2000 and S-fund which gained just 0.13% and 0.12% respectively yesterday.
While the S&P 500 is reaching toward those early February highs, the RSP, which is the Equal Weighted S&P 500 Index, is still well off its highs. Just a reminder that the SPY (S&P 500) and the RSP are tracking the same 500 stocks. This shows us that the gains in the market are still mostly coming from those big tech stocks that are heavily weighted in the Dow, S&P 500, and Nasdaq indices. Meanwhile the average stock is lagging quite a bit.
We got some earnings from Tesla and IBM last night and there was nothing there that should impact the market as a whole. Tesla margins were a bit light and the stock was down after hours, and IBM beat estimates and was up modestly.
The S&P 500 (C-fund) remained in the F-flag and that continues to stretch out for a third week. There's not much wrong here except for the fact that F-flags tend to break down. Of course there's no guarantees about that. This grind out higher into the old high, but from there this index may be quite exhausted and oversold to break out.
DWCPF (S-fund) is still trading in a crowded area where support and resistance are converging. It's still very much in a bear flag but the bulls have not allowed the bears to break the flag down.
The EFA (I-fund) was down yesterday filling another small open gap, but there's so many more open gaps below that I am shying away from this fund. I would strongly consider it on a good pullback, but not now.
BND (Bonds / F-fund) tested a plethora of support and is holding and could be an area to be buying, but any move below 73.15 would be dangerous.
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.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The only thing more difficult to write about than a market that is moving against you, is a market that isn't moving. I don't have much to add to my recent analysis since little has changed. Even earnings releases have been uneventful so far. That could change as the reporting names get bigger next week, but for now, here's what I'm seeing.
The Yield on the 10-year Treasury was up but closed off its highs after finding resistance at the high from March 22. The 2-year T-Note Yield (not shown), was up even more to 4.25%, widening the yield curve between the two. More signs of a possible recession without too much more to back that up yet.
Those regional banks were up sharply yesterday and I would have expected that to help out the small cap indices yesterday, but the 3.94% gain in KRE dwarfed the returns of the Russell 2000 and S-fund which gained just 0.13% and 0.12% respectively yesterday.
While the S&P 500 is reaching toward those early February highs, the RSP, which is the Equal Weighted S&P 500 Index, is still well off its highs. Just a reminder that the SPY (S&P 500) and the RSP are tracking the same 500 stocks. This shows us that the gains in the market are still mostly coming from those big tech stocks that are heavily weighted in the Dow, S&P 500, and Nasdaq indices. Meanwhile the average stock is lagging quite a bit.
We got some earnings from Tesla and IBM last night and there was nothing there that should impact the market as a whole. Tesla margins were a bit light and the stock was down after hours, and IBM beat estimates and was up modestly.
The S&P 500 (C-fund) remained in the F-flag and that continues to stretch out for a third week. There's not much wrong here except for the fact that F-flags tend to break down. Of course there's no guarantees about that. This grind out higher into the old high, but from there this index may be quite exhausted and oversold to break out.
DWCPF (S-fund) is still trading in a crowded area where support and resistance are converging. It's still very much in a bear flag but the bulls have not allowed the bears to break the flag down.
The EFA (I-fund) was down yesterday filling another small open gap, but there's so many more open gaps below that I am shying away from this fund. I would strongly consider it on a good pullback, but not now.
BND (Bonds / F-fund) tested a plethora of support and is holding and could be an area to be buying, but any move below 73.15 would be dangerous.
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.
