Stocks were choppy and mixed yesterday as early gains faded after the FOMC meeting minutes were released. The Nasdaq and small caps did close positive, while the Dow and S&P 500 were down, but overall it was mostly a stalemate after the 3-day sell off. The I-fund took a hit after another rally in the dollar. Yields were down giving the bond market and the F-fund some needed relief yesterday.
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As the last of the Q4 earnings roll in, the market seems to clamoring for the next catalyst. Yesterday it was the FOMC meeting minutes and the indices were trying to rally, trading near their highs of the day before the release of the minutes turned that around and pushed stocks back to the lows of the day before a late push off the lows into the close.
I had mentioned that we don't get any meaningful inflationary reports for the rest of the month, but I forgot about that PCE Prices report, which has been a non-event for years when inflation wasn't a concern, but is now a Fed favorite as an inflationary indicator, so it certainly is important. And that will come out on Friday, along with personal income data, which is also a hot button these days.
Today we'll get another rear-view mirror GDP report for the 4th quarter, and this is one of those where too good may be bad, and vice versa.
The 10-Year Treasury Yield was down but it did hold above the prior highs after Tuesday's breakout. The spinning top candlestick formation yesterday could be an indication of indecision and a possible turning point.
The dollar was up again and it moved to its highest close since November as it trades within that old open gap again, where the UUP failed back in January.
The S&P 500 (C-fund) chart has a lot going on, and as of now it has experienced another 5% pullback off the highs from earlier this month, and that's after a 20% rally off the October low. There's noting unusual about a 5% pullback, even in a bull market, although when interest rates were 0%, pullbacks tended to be a lot more shallow than the stock market had been historically accustomed. So as of now, this is normal action - although this probably needs to hold close to this area where a bevy of key support is congregating. Perhaps we'll see some sideways action like we saw after previous sharp pullbacks - marked in red rectangles.
This longer-term chart shows the old resistance line coming back in the picture, and the bulls would like to see that old resistance become support. The 50-day simple moving average is near 3980, and the rising support line off the lows is coming up into the same area. A move below 3900 would really give the bears something to feed upon.
The negative seasonality in the second half of February has certainly been a factor, and while it doesn't get very bullish going forward, the worst numbers (percentage of times positive) may be behind us. There is no February 29 this year so after today it looks like mostly a coin flip.
DWCPF (S-fund) was up yesterday and remains above important make or break support. It remains above the 50 and 200 day averages, the previous highs and, despite falling below its 20-day EMA, it continues to trade within that bullish looking flag with an open gap up by 1765.
The EFA (I-fund) was down moderately yesterday and a lot of that had to do with the move higher in the dollar. It has now closed below its 20-day EMA for two straight days, and a 3rd would be a warning. There is some potential support right at yesterday's lows where a couple of previous peaks connect, but it wouldn't be too surprising for this to come down to test the 50-day EMA, especially if the dollar breaks above its previous high.
BND (bonds / F-fund) was up but this charts has been deteriorating for weeks after breaking down from its rising support earlier this month. The F-fund is down about 2.6% this month, lagging all of the TSP funds.
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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As the last of the Q4 earnings roll in, the market seems to clamoring for the next catalyst. Yesterday it was the FOMC meeting minutes and the indices were trying to rally, trading near their highs of the day before the release of the minutes turned that around and pushed stocks back to the lows of the day before a late push off the lows into the close.
I had mentioned that we don't get any meaningful inflationary reports for the rest of the month, but I forgot about that PCE Prices report, which has been a non-event for years when inflation wasn't a concern, but is now a Fed favorite as an inflationary indicator, so it certainly is important. And that will come out on Friday, along with personal income data, which is also a hot button these days.
Today we'll get another rear-view mirror GDP report for the 4th quarter, and this is one of those where too good may be bad, and vice versa.
The 10-Year Treasury Yield was down but it did hold above the prior highs after Tuesday's breakout. The spinning top candlestick formation yesterday could be an indication of indecision and a possible turning point.
The dollar was up again and it moved to its highest close since November as it trades within that old open gap again, where the UUP failed back in January.
The S&P 500 (C-fund) chart has a lot going on, and as of now it has experienced another 5% pullback off the highs from earlier this month, and that's after a 20% rally off the October low. There's noting unusual about a 5% pullback, even in a bull market, although when interest rates were 0%, pullbacks tended to be a lot more shallow than the stock market had been historically accustomed. So as of now, this is normal action - although this probably needs to hold close to this area where a bevy of key support is congregating. Perhaps we'll see some sideways action like we saw after previous sharp pullbacks - marked in red rectangles.
This longer-term chart shows the old resistance line coming back in the picture, and the bulls would like to see that old resistance become support. The 50-day simple moving average is near 3980, and the rising support line off the lows is coming up into the same area. A move below 3900 would really give the bears something to feed upon.
The negative seasonality in the second half of February has certainly been a factor, and while it doesn't get very bullish going forward, the worst numbers (percentage of times positive) may be behind us. There is no February 29 this year so after today it looks like mostly a coin flip.
DWCPF (S-fund) was up yesterday and remains above important make or break support. It remains above the 50 and 200 day averages, the previous highs and, despite falling below its 20-day EMA, it continues to trade within that bullish looking flag with an open gap up by 1765.
The EFA (I-fund) was down moderately yesterday and a lot of that had to do with the move higher in the dollar. It has now closed below its 20-day EMA for two straight days, and a 3rd would be a warning. There is some potential support right at yesterday's lows where a couple of previous peaks connect, but it wouldn't be too surprising for this to come down to test the 50-day EMA, especially if the dollar breaks above its previous high.
BND (bonds / F-fund) was up but this charts has been deteriorating for weeks after breaking down from its rising support earlier this month. The F-fund is down about 2.6% this month, lagging all of the TSP funds.
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.
