The bulls kept the pressure yesterday on and the Dow made it 12 days of gains in a row with the modest 27-point uptick yesterday. There was some selling before the closing bell to take the indices off their highs just prior to the earnings releases from Microsoft and Alphabet (Google) which came in better than expected. Microsoft, which was up 1.7% yesterday, was initially down on the news in after hours trading, although the conference call and all important guidance was still to come. Google was up big after their release. Bonds were down on the day and a negative reversal in the dollar helped the I-fund hold onto a small gain.
[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]
Alphabet (GOOG) is not a Dow stocks but Microsoft is, so the Dow may have some added pressure today if Microsoft remains weak after hours. That could put the 12 day winning streak in jeopardy for the Dow although with the Fed giving their decision on interest rates at 2 PM ET today, anything could happen.
Texas Instruments was down after hours, as was Snap, but these just aren't the market movers that the FANG / MAGA stocks are.
The bears are running out of reason to be bearish, although markets are more likely to climb up the wall and worry, and peak when everything looks great. The theory there being that if everything looks great, most people have already bought already, where markets climb a wall of worry because nervous cash on the sidelines slowly makes its way into the market.
Right now we're seeing many indicators pricing in a lot of good news and upside momentum is close to prior peaks in the market, when the market was trending higher or lower, although very strong markets can and will shrug off overbought conditions as we have seen for the last month.
The yield on the 10-year Treasury Bond popped above the head and shoulders pattern we have been watching. It may or may not be breaking out, but as I mentioned yesterday, head and shoulders patterns can be continuation patterns that don't always breakdown as is typically expected.
The dollar gapped opened higher and above the resistance area that I noted yesterday, but it peaked at that open price and fell the rest of the day, closing back below resistance. This could be a good sign for the I-fund, although the trend remains up and the dollar may have just needed a day of rest.
I mentioned the recent strength in the price of oil yesterday and we see it is breaking out above a long term descending trading channel. It closed just below $80 a barrel but that puts it above resistance making the path of least resistance up. It is typically stronger during summer months when demand is higher, so prepare for gasoline prices to start moving up again.
The Fed's decision on interest rates will be announced at 2 PM ET with commentary afterward. Investors are expecting a 0.25% hike today but what they may not expect is future rate hike considerations. The market seems to think they will be done after today.
Meta reports after the bell today, and Apple and Amazon both report on Thursday of next week, August 3rd. They are both up around 50% for the year.
The S&P 500 (C-fund) made another new intraday and closing high with the 0.28% gain yesterday. It closed off the highs with perhaps some resistance in the 4580 area where it stopped last week as well. The trend is up but the old cup and handle formation and the open gap below tell us that a pullback to the 4450 - 4470 wouldn't be a surprise as it would test the old breakout area. It remains well above its moving averages but even sideways action helps it get closer to them as they are all rising at a fast pace.
DWCPF (S-fund) closed well off the highs but held onto a 0.16% gain on the day. The modest pullback is allowing the old resistance line to catch up and be tested as support - maybe today. If it does fall back into the red channel then the bears may try to put some pressure on, but at this point they may need help from the Fed to make that happen during this bullish run.
The EFA (I-fund) was up slightly and the dollar's negative reversal helped. Being near the top of a range and having large open gaps below appears to give the bears the advantage here, but until then we'd have to say the bulls remain in charge and the bears have something to prove.
BND (bonds / F-fund) backed off from the resistance we have been noting after it tested the top of the descending trading channel and the the bottom of what looks like a bearish flag. Perhaps the gap near 72 just needs to get filled, and that seems to be the way it is heading.
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
Daily Market Commentary Archives
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]
Alphabet (GOOG) is not a Dow stocks but Microsoft is, so the Dow may have some added pressure today if Microsoft remains weak after hours. That could put the 12 day winning streak in jeopardy for the Dow although with the Fed giving their decision on interest rates at 2 PM ET today, anything could happen.
Texas Instruments was down after hours, as was Snap, but these just aren't the market movers that the FANG / MAGA stocks are.
The bears are running out of reason to be bearish, although markets are more likely to climb up the wall and worry, and peak when everything looks great. The theory there being that if everything looks great, most people have already bought already, where markets climb a wall of worry because nervous cash on the sidelines slowly makes its way into the market.
Right now we're seeing many indicators pricing in a lot of good news and upside momentum is close to prior peaks in the market, when the market was trending higher or lower, although very strong markets can and will shrug off overbought conditions as we have seen for the last month.
The yield on the 10-year Treasury Bond popped above the head and shoulders pattern we have been watching. It may or may not be breaking out, but as I mentioned yesterday, head and shoulders patterns can be continuation patterns that don't always breakdown as is typically expected.
The dollar gapped opened higher and above the resistance area that I noted yesterday, but it peaked at that open price and fell the rest of the day, closing back below resistance. This could be a good sign for the I-fund, although the trend remains up and the dollar may have just needed a day of rest.
I mentioned the recent strength in the price of oil yesterday and we see it is breaking out above a long term descending trading channel. It closed just below $80 a barrel but that puts it above resistance making the path of least resistance up. It is typically stronger during summer months when demand is higher, so prepare for gasoline prices to start moving up again.
The Fed's decision on interest rates will be announced at 2 PM ET with commentary afterward. Investors are expecting a 0.25% hike today but what they may not expect is future rate hike considerations. The market seems to think they will be done after today.
Meta reports after the bell today, and Apple and Amazon both report on Thursday of next week, August 3rd. They are both up around 50% for the year.
The S&P 500 (C-fund) made another new intraday and closing high with the 0.28% gain yesterday. It closed off the highs with perhaps some resistance in the 4580 area where it stopped last week as well. The trend is up but the old cup and handle formation and the open gap below tell us that a pullback to the 4450 - 4470 wouldn't be a surprise as it would test the old breakout area. It remains well above its moving averages but even sideways action helps it get closer to them as they are all rising at a fast pace.
DWCPF (S-fund) closed well off the highs but held onto a 0.16% gain on the day. The modest pullback is allowing the old resistance line to catch up and be tested as support - maybe today. If it does fall back into the red channel then the bears may try to put some pressure on, but at this point they may need help from the Fed to make that happen during this bullish run.
The EFA (I-fund) was up slightly and the dollar's negative reversal helped. Being near the top of a range and having large open gaps below appears to give the bears the advantage here, but until then we'd have to say the bulls remain in charge and the bears have something to prove.
BND (bonds / F-fund) backed off from the resistance we have been noting after it tested the top of the descending trading channel and the the bottom of what looks like a bearish flag. Perhaps the gap near 72 just needs to get filled, and that seems to be the way it is heading.
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
Daily Market Commentary Archives
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.
