Stocks got a boost from Tesla's 22% gain on Thursday, but otherwise it wasn't much of a bounce back after the near 1% loss on Wednesday. The Dow was down sharply, mostly on big losses in IBM and Honeywell, but small caps, the F-fund, and the I-fund all did well as yields and the dollar came down to help. Without a Mag 7 earnings report to help today, can the market add onto yesterday's modest gains?
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This may be petty but yesterday, despite the big gain, there were actually 113 new 52-week lows in the Nasdaq vs. 101 new highs. Otherwise the advance / decline numbers were slightly positive for the NYSE and the Nasdaq.
It's a rough week for the stock market being the week after options expiration week before the election, and it has a history of trouble. We all know the contentious nature of the election, and there's been no shortage of coverage of that here as far as being a concern for the market. Normally we see a sell the rumor, buy the news event as the uncertainty becomes more certain after the election, but is anyone else worried about the stock market come Wednesday, November 6? No matter who wins, the other side is not likely going down quietly. What that does to the market we'll see but more concerning to the market is the delay in announcing a winner.
The recent spike higher in yields was getting to the point of giving investors concerns about economic growth. Higher interest rates tends to hinder growth, so yesterday's pullback in most yields, both long and short-term, gave the stock market a day's reprieve from the bears. The angle of incline is not likely sustainable, but there is some support near 4.18%. A move below 4.10% would probably result in a decline much lower, which should be helpful to the stock market, so let's see if that support will hold before getting too optimistic.
The dollar also pulled back giving the beleaguered I-fund a boost yesterday. It also helped the rally in gold, silver, and bitcoin to continue.
The Dow Transportation Index was down slightly and off the lows after bouncing off its 50-day EMA and a rising support line. UPS reported earnings and 5.3% gain helped the Transports hold at that support. Holding here would be key for this market leader.
I see some good things in the index charts, but there are some concerning indicators and other idiosyncrasies that we have to be concerned about. I've named a few in recent reports, and here's another. We had another decline in year over year full time employment. These are generally statistics that we see before the economy heads into a recession. Is it different this time?
Admin Note: The talk is over. Today we will start the migration to the new forum software. Unfortunately the forum support team does not work on weekends but they are available on Friday morning. The forum will have a new address / URL of forum.tsptalk.com. It's there now but sometime Friday morning we will be moving everything from our current forum (www.tsptalk.com/mb) to the new servers and overwrite any posts that were there during testing, which are a few days old. Anyway, the old forum will be shut Thursday night in the hope of getting the migration started some time Friday morning. Come Monday morning it will be out with the old and in with the new.
As for the website's servers, we will be moving to the new servers this weekend and often that can be messy, but testing looks good. Theoretically it should not impact anything on your end if things go smoothly, but if you notice any problems come Monday morning, we'd appreciate an email pointing to the error condition. Please send the email to support at our website address -- don't want the bots to see the email address.
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Again, it will not impact Premium Service IFT email and text alerts.
The SPY (S&P 500 / C-fund) chart looks like a mess with all of that support and resistance converging. There is certainly enough support to hold this up, but that would make any breakdown that much more serious. The bearish rising wedge is still a key concern. 5750 and 5700 look like lines in the sand support, and that's only if the support at 5800 does not hold, and it certainly can hold.
Clearly the 20-day EMA is the key right now. When it holds, good things happen. When it fails, it can get ugly on this chart.
DWCPF (S-fund) is also holding at a very key level where the 20-day EMA - a strong bull market's support line, and the high from the end of July try to hold up the index. If that holds, it looks great. If it breaks, there is a lot of room below.
The I-fund: The EFA tracking ETF was down 1.01% yesterday, ACWX was up 0.27%, and the "ex USA ex China ex Hong Kong Index" was up 0.12%. The final return should be somewhere in between those. The guessing game for the daily I-fund price may go on through the end of the year as the TSP transitions into the new tracking index, which is supposed to eventually mimic the "ex USA ex China ex Hong Kong Index." You can see the TSP's eventual final daily price and return posted on our site each evening.
The EFA is in a key area where that orange 100-day EMA broke down and could now act as resistance. There is also a couple of open gaps below that may need to get satisfied before the downside is complete, but it all may trigger on whether the dollar pulls back or not. A pullback in the dollar would likely mean the low is in.
BND (Bonds / F-fund) was up but also nearing an old open gap. If yields pullback from here, the F-fund could bounce back, but if the positive trend in yields continues, that open gap is vulnerable, and then there's the 200-day EMA, which would surprise me, but yields do tend to move in one direction longer than I ever think possible.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
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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.
Daily TSP Funds Return
This may be petty but yesterday, despite the big gain, there were actually 113 new 52-week lows in the Nasdaq vs. 101 new highs. Otherwise the advance / decline numbers were slightly positive for the NYSE and the Nasdaq.
It's a rough week for the stock market being the week after options expiration week before the election, and it has a history of trouble. We all know the contentious nature of the election, and there's been no shortage of coverage of that here as far as being a concern for the market. Normally we see a sell the rumor, buy the news event as the uncertainty becomes more certain after the election, but is anyone else worried about the stock market come Wednesday, November 6? No matter who wins, the other side is not likely going down quietly. What that does to the market we'll see but more concerning to the market is the delay in announcing a winner.
The recent spike higher in yields was getting to the point of giving investors concerns about economic growth. Higher interest rates tends to hinder growth, so yesterday's pullback in most yields, both long and short-term, gave the stock market a day's reprieve from the bears. The angle of incline is not likely sustainable, but there is some support near 4.18%. A move below 4.10% would probably result in a decline much lower, which should be helpful to the stock market, so let's see if that support will hold before getting too optimistic.
The dollar also pulled back giving the beleaguered I-fund a boost yesterday. It also helped the rally in gold, silver, and bitcoin to continue.
The Dow Transportation Index was down slightly and off the lows after bouncing off its 50-day EMA and a rising support line. UPS reported earnings and 5.3% gain helped the Transports hold at that support. Holding here would be key for this market leader.
I see some good things in the index charts, but there are some concerning indicators and other idiosyncrasies that we have to be concerned about. I've named a few in recent reports, and here's another. We had another decline in year over year full time employment. These are generally statistics that we see before the economy heads into a recession. Is it different this time?
Admin Note: The talk is over. Today we will start the migration to the new forum software. Unfortunately the forum support team does not work on weekends but they are available on Friday morning. The forum will have a new address / URL of forum.tsptalk.com. It's there now but sometime Friday morning we will be moving everything from our current forum (www.tsptalk.com/mb) to the new servers and overwrite any posts that were there during testing, which are a few days old. Anyway, the old forum will be shut Thursday night in the hope of getting the migration started some time Friday morning. Come Monday morning it will be out with the old and in with the new.
As for the website's servers, we will be moving to the new servers this weekend and often that can be messy, but testing looks good. Theoretically it should not impact anything on your end if things go smoothly, but if you notice any problems come Monday morning, we'd appreciate an email pointing to the error condition. Please send the email to support at our website address -- don't want the bots to see the email address.
.Again, it will not impact Premium Service IFT email and text alerts.
The SPY (S&P 500 / C-fund) chart looks like a mess with all of that support and resistance converging. There is certainly enough support to hold this up, but that would make any breakdown that much more serious. The bearish rising wedge is still a key concern. 5750 and 5700 look like lines in the sand support, and that's only if the support at 5800 does not hold, and it certainly can hold.
Clearly the 20-day EMA is the key right now. When it holds, good things happen. When it fails, it can get ugly on this chart.
DWCPF (S-fund) is also holding at a very key level where the 20-day EMA - a strong bull market's support line, and the high from the end of July try to hold up the index. If that holds, it looks great. If it breaks, there is a lot of room below.
The I-fund: The EFA tracking ETF was down 1.01% yesterday, ACWX was up 0.27%, and the "ex USA ex China ex Hong Kong Index" was up 0.12%. The final return should be somewhere in between those. The guessing game for the daily I-fund price may go on through the end of the year as the TSP transitions into the new tracking index, which is supposed to eventually mimic the "ex USA ex China ex Hong Kong Index." You can see the TSP's eventual final daily price and return posted on our site each evening.
The EFA is in a key area where that orange 100-day EMA broke down and could now act as resistance. There is also a couple of open gaps below that may need to get satisfied before the downside is complete, but it all may trigger on whether the dollar pulls back or not. A pullback in the dollar would likely mean the low is in.
BND (Bonds / F-fund) was up but also nearing an old open gap. If yields pullback from here, the F-fund could bounce back, but if the positive trend in yields continues, that open gap is vulnerable, and then there's the 200-day EMA, which would surprise me, but yields do tend to move in one direction longer than I ever think possible.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
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.
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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