Stocks were mixed on Thursday but the bulls were really in charge as the indices that were positive were up big, and the ones that were down were just slightly lower. The Dow lost 70-points and the S&P 500 shed 5, and that has them both down slightly for the week, but the Nasdaq and small caps rallied back strongly from Wednesday's losses, and continue to outperform.
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Not that it means much, but the Dow did close back below 30,000 after four straight closes above it. It is struggling at some resistance right now. This is some kind of a flag formation or rising wedge (blue) and could break either way, but that open gap near 28,500 still looks like a possible target, so I have to guess it will break to the the downside. It's just whether we can get that kind of action between now and the historically strong holiday season.
The initial jobless claims came in 10,000 higher (weaker) than the estimates and the futures went lower after that release, but we know what happens when the opening bell rings - the buyers jump in because bad news is good news if all you care about is stimulus. We got two more consecutive days of new daily COVID cases above 200,000. That 5 in the last 7 days. Wall Street is obviously not concerned right now. Is it because there are millions of tests being given each day and the rising counts are inevitable? Or is about getting money out of Washington because of the increase?
Chart source: covidtracking.com/data/charts/us-daily-positive
After the bell on Thursday, an FDA panel recommended approval of Pfizer's vaccine for emergency use. So far the futures are flat so traders aren't showing any signs of being overly excited about this.
The S&P 500 (C-fund) opened sharply lower on Thursday, and despite battling back rather easily and closing with just a small loss after turning positive, we may have seen a crack in the technical picture emerge. But that's what the bears are doing now - using a microscope to find some reason for this market to take a break. But it is, what it is - a minor breakdown and we just have to see where it goes from here.
The strength in the DWCPF Index / S-fund chart makes us less inclined to be worried, but how long can this keep going like this without some kind of a reset? It is still ridiculously above its 200-day EMA. Yesterday's low hit some support that held, and that's the area I'll be watching for a warning sign.
The EFA / I-fund looks similar with a modest breakdown a few days ago, but yet it closed at its second highest level yesterday so it's tough to be concerned here until we see a more meaningful breakdown somewhere.
The Transportation Index did breakdown yesterday from the recent rising channel, but it did find support and bounce off of another support line - the old resistance line (blue), so now 12,600 could be the line in the sand.
The Nasdaq had some hiccups in October and November and everyone was talking like the tech leadership was over and we were seeing a rotation into other sectors. Fast forward another month and the rocket ship ride seems to have resumed rather nicely. You can see the key support levels on the chart after bouncing right back from that 2% decline on Wednesday.
The VIX moved up again so that's two closes above that resistance line, so perhaps we'll get some volatility back before the holiday's positive seasonality kicks in - as if the market needs another excuse to rally. But we have seen some shaky holiday trading over the years so there are no guarantees.
BND (Bonds / F-fund) shot up and held again at the 50-day EMA but this seems to be in more of a range than a trend right now. If we knew the 50-day EMA was going to hold I'd be looking at the F-fund right now. The fact that COVID cases are soaring and the new lockdowns leave the economy vulnerable, I can see why bonds might want to go higher. Since there is nothing convincing from this savvy group, I don't think they know either.
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. Have a great weekend!
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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Not that it means much, but the Dow did close back below 30,000 after four straight closes above it. It is struggling at some resistance right now. This is some kind of a flag formation or rising wedge (blue) and could break either way, but that open gap near 28,500 still looks like a possible target, so I have to guess it will break to the the downside. It's just whether we can get that kind of action between now and the historically strong holiday season.
The initial jobless claims came in 10,000 higher (weaker) than the estimates and the futures went lower after that release, but we know what happens when the opening bell rings - the buyers jump in because bad news is good news if all you care about is stimulus. We got two more consecutive days of new daily COVID cases above 200,000. That 5 in the last 7 days. Wall Street is obviously not concerned right now. Is it because there are millions of tests being given each day and the rising counts are inevitable? Or is about getting money out of Washington because of the increase?
Chart source: covidtracking.com/data/charts/us-daily-positive
After the bell on Thursday, an FDA panel recommended approval of Pfizer's vaccine for emergency use. So far the futures are flat so traders aren't showing any signs of being overly excited about this.
The S&P 500 (C-fund) opened sharply lower on Thursday, and despite battling back rather easily and closing with just a small loss after turning positive, we may have seen a crack in the technical picture emerge. But that's what the bears are doing now - using a microscope to find some reason for this market to take a break. But it is, what it is - a minor breakdown and we just have to see where it goes from here.
The strength in the DWCPF Index / S-fund chart makes us less inclined to be worried, but how long can this keep going like this without some kind of a reset? It is still ridiculously above its 200-day EMA. Yesterday's low hit some support that held, and that's the area I'll be watching for a warning sign.
The EFA / I-fund looks similar with a modest breakdown a few days ago, but yet it closed at its second highest level yesterday so it's tough to be concerned here until we see a more meaningful breakdown somewhere.
The Transportation Index did breakdown yesterday from the recent rising channel, but it did find support and bounce off of another support line - the old resistance line (blue), so now 12,600 could be the line in the sand.
The Nasdaq had some hiccups in October and November and everyone was talking like the tech leadership was over and we were seeing a rotation into other sectors. Fast forward another month and the rocket ship ride seems to have resumed rather nicely. You can see the key support levels on the chart after bouncing right back from that 2% decline on Wednesday.
The VIX moved up again so that's two closes above that resistance line, so perhaps we'll get some volatility back before the holiday's positive seasonality kicks in - as if the market needs another excuse to rally. But we have seen some shaky holiday trading over the years so there are no guarantees.
BND (Bonds / F-fund) shot up and held again at the 50-day EMA but this seems to be in more of a range than a trend right now. If we knew the 50-day EMA was going to hold I'd be looking at the F-fund right now. The fact that COVID cases are soaring and the new lockdowns leave the economy vulnerable, I can see why bonds might want to go higher. Since there is nothing convincing from this savvy group, I don't think they know either.
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. Have a great weekend!
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.
