Stocks opened mostly higher on Tuesday but it turned into a Turnaround Tuesday as the indices flipped to the down side and the selling intensified in that last hour of trading. The Dow lost 457-points. Those big tech stocks that we have been talking about were all flying high in early trading, and once they turned around, the rest of the market relented and fell along with them.
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Small caps lagged with a 3% loss. The I-fund was spared, at least for a day, since the selling came so late in the U.S. market while the overseas markets were long since closed.
The price of oil rallied yesterday, as did bonds which saw a successful 10-year note auction. That was happening around the same time that Dr. Fauci was giving some rather sobering updates on the coronavirus. Whatever it was, it happened at resistance on many of the index charts, and perhaps the bear market rally has finally come too far?
I mentioned on Monday that the Fed is arguably, "violating the Federal Reserve Act of 1913 by buying corporate bonds in a roundabout way, but they're doing it." Yesterday they announced the buying of corporate bonds ETF's as well. Maybe that's how they are getting around buying them, I guess - buying the ETFs.
The S&P 500 may not go back down to test the lows, although that may have been an automatic if not for the Fed's unprecedented spending, but being near the top of that long term trading range between about 2600 and 2950, may prove too much in the short-term for the already historic rebound off the lows for it to keep going.
Tomorrow we get more jobs data with a new week's initial jobless claims, which is expected to add another 2.5 million to the list of those losing their lobs.
The S&P 500 (C-fund) tried for a 3rd time to overtake the 200-day EMA. That's not so easy in a bear market but as I mentioned yesterday, it's not uncommon to see a pop above that average line before it gets sold, rather than the average itself knocking it down as it as it has been recently. We saw another support line break down but it is still above the key 20 and 50-day EMAs.
The DWCPF (S-fund) lost 3% so the steroid moves continue - up and down. The bottom of that rising trading channel is being tested again so today's action looks to be very important - especially with the 50-day EMA in the same area as the support line.
The Dow Transportation Index continues to struggle but it hasn't been a full breakdown yet. 8000 looks to be the line in the sand.
The EFA (I-fund) was down sharply and because it trades all day on the U.S. market, it was more negative than the I-fund price because of the timing of the selling, as I mentioned up above.
The Financial sector has been floundering as well with yields remaining so low. That 21 area looks to be the support that needs to hold and avoid a possible test of the lows.
The BND / F-fund had been sloping lower for weeks. It looked like a bull flag but it kept extending so now the question is whether it still is a bull flag or just a new direction for bonds which were flirting with an all time high close just a handful of days a go, or so.
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
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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Small caps lagged with a 3% loss. The I-fund was spared, at least for a day, since the selling came so late in the U.S. market while the overseas markets were long since closed.
The price of oil rallied yesterday, as did bonds which saw a successful 10-year note auction. That was happening around the same time that Dr. Fauci was giving some rather sobering updates on the coronavirus. Whatever it was, it happened at resistance on many of the index charts, and perhaps the bear market rally has finally come too far?
I mentioned on Monday that the Fed is arguably, "violating the Federal Reserve Act of 1913 by buying corporate bonds in a roundabout way, but they're doing it." Yesterday they announced the buying of corporate bonds ETF's as well. Maybe that's how they are getting around buying them, I guess - buying the ETFs.
The S&P 500 may not go back down to test the lows, although that may have been an automatic if not for the Fed's unprecedented spending, but being near the top of that long term trading range between about 2600 and 2950, may prove too much in the short-term for the already historic rebound off the lows for it to keep going.
Tomorrow we get more jobs data with a new week's initial jobless claims, which is expected to add another 2.5 million to the list of those losing their lobs.
The S&P 500 (C-fund) tried for a 3rd time to overtake the 200-day EMA. That's not so easy in a bear market but as I mentioned yesterday, it's not uncommon to see a pop above that average line before it gets sold, rather than the average itself knocking it down as it as it has been recently. We saw another support line break down but it is still above the key 20 and 50-day EMAs.
The DWCPF (S-fund) lost 3% so the steroid moves continue - up and down. The bottom of that rising trading channel is being tested again so today's action looks to be very important - especially with the 50-day EMA in the same area as the support line.
The Dow Transportation Index continues to struggle but it hasn't been a full breakdown yet. 8000 looks to be the line in the sand.
The EFA (I-fund) was down sharply and because it trades all day on the U.S. market, it was more negative than the I-fund price because of the timing of the selling, as I mentioned up above.
The Financial sector has been floundering as well with yields remaining so low. That 21 area looks to be the support that needs to hold and avoid a possible test of the lows.
The BND / F-fund had been sloping lower for weeks. It looked like a bull flag but it kept extending so now the question is whether it still is a bull flag or just a new direction for bonds which were flirting with an all time high close just a handful of days a go, or so.
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
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.
