Stocks were mixed and the Nasdaq closed at a new record high yesterday, meanwhile small caps and the Transports lagged badly so we can't seem to get a broad rally across all / most indices. It's a holiday week and trading volume will be light and there is a possibility of a pre / post holiday reversals, so it may be a crazy week, which will culminate with the monthly jobs report on Friday. Bond yields were up again, and now we think we know why.
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There was a lot of green in those large cap indices, but as you see below, many more stocks were down than up on the day and the broader indices and non-large cap tech stocks, struggled.
I had been scratching my head about why the 10-year Treasury Yield jumped sharply over the last two trading sessions. Then someone in the forum pointed out to me that the Wall Street Journal was speculating that this happened after the debate and could be a result of a potential Republican sweep in November. That may be an influence, but the chart did need an open gap filled near 4.52% and that was as good of an excuse as any. From there however, it may have a tougher time moving higher with a Fed interest rate cut getting closer.
Once again here is the difference between the S&P 500 Index and the Equal Weighted S&P 500. Same 500 stocks but the Magnificent 7 and other mega caps are not given any weighted advantage based on market capitalization. They are acting completely different.
If you were in the C-fund you owned all of the stocks above, but lucky for you those large cap techs are paying you more. The reason for pointing it out is to show that the average stock is still struggling and may be suggesting possible internal weakness. During the prior two trading days it was the other was around so I will chock this up to the end / beginning of quarter and see what happens the rest of the week before drawing a conclusion. Of course this is a weird holiday week so we may not get a straight answer yet.
The Dow Transportation Index was one of those indices that did not play along yesterday and this has been bordering on a breakout for several days and seems to be at a very pivotal point.
We have the 4h of July holiday on Thursday and just a half day of trading on Wednesday so it should be a week of light trading. We will get the important monthly jobs report on Friday, and with many folks off on a long holiday weekend, the light volume trading could cause the indices to get pushed around more easily by big money traders.
I don't know how many folks are actually paying attention this week as it's a big week for vacations, so I will keep things brief and I will probably post a very quick commentary on Friday.
The June AutoTracker winners have been posted and it was tough to beat that C-fund. Just two did it. Here are the winners and here are the monthly and annual (non-premium members) standings through June. Track your return on the AutoTracker - it's free!
The S&P 500 (C-fund) has been moving sideways for about two weeks now and it is now trading somewhere in the middle of a fairly wide trading channel so there's wiggle room on both sides. We're seeing another PMO crossover take place, this one bearish, but the bearish crossovers haven't exactly been major sell signals, until the choppy action in the indicator during February and March finally broke down. The bearish crossover in June turned out to be a better buying opportunity. Friday's negative reversal sticks out like a sore thumb so that's a technical headwind and maybe a top?
The S-fund (DWCPF) gave back all of Friday's gains yesterday as the disappointment in the small caps continues. The chart hasn't broken yet but it looks like it could go either way with that bear flag looming, but that rounded low is still holding.
The EFA (I-fund) was up modestly but it too has a bearish flag glaring at us. The gap above is still open and it could try to fill that first.
BND (bonds / F-fund) tanked for a second straight day and it was likely because of what we talked about with the 10-year yield above - debate related. But technically it is coming into some decent support and the Fed is due to cut rates so I wouldn't be surprised if this channel holds, or maybe the open gap by 71 gets filled first.
Thanks so much for reading! We'll see you back here tomorrow.
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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There was a lot of green in those large cap indices, but as you see below, many more stocks were down than up on the day and the broader indices and non-large cap tech stocks, struggled.
I had been scratching my head about why the 10-year Treasury Yield jumped sharply over the last two trading sessions. Then someone in the forum pointed out to me that the Wall Street Journal was speculating that this happened after the debate and could be a result of a potential Republican sweep in November. That may be an influence, but the chart did need an open gap filled near 4.52% and that was as good of an excuse as any. From there however, it may have a tougher time moving higher with a Fed interest rate cut getting closer.
Once again here is the difference between the S&P 500 Index and the Equal Weighted S&P 500. Same 500 stocks but the Magnificent 7 and other mega caps are not given any weighted advantage based on market capitalization. They are acting completely different.
If you were in the C-fund you owned all of the stocks above, but lucky for you those large cap techs are paying you more. The reason for pointing it out is to show that the average stock is still struggling and may be suggesting possible internal weakness. During the prior two trading days it was the other was around so I will chock this up to the end / beginning of quarter and see what happens the rest of the week before drawing a conclusion. Of course this is a weird holiday week so we may not get a straight answer yet.
The Dow Transportation Index was one of those indices that did not play along yesterday and this has been bordering on a breakout for several days and seems to be at a very pivotal point.
We have the 4h of July holiday on Thursday and just a half day of trading on Wednesday so it should be a week of light trading. We will get the important monthly jobs report on Friday, and with many folks off on a long holiday weekend, the light volume trading could cause the indices to get pushed around more easily by big money traders.
I don't know how many folks are actually paying attention this week as it's a big week for vacations, so I will keep things brief and I will probably post a very quick commentary on Friday.
The June AutoTracker winners have been posted and it was tough to beat that C-fund. Just two did it. Here are the winners and here are the monthly and annual (non-premium members) standings through June. Track your return on the AutoTracker - it's free!
The S&P 500 (C-fund) has been moving sideways for about two weeks now and it is now trading somewhere in the middle of a fairly wide trading channel so there's wiggle room on both sides. We're seeing another PMO crossover take place, this one bearish, but the bearish crossovers haven't exactly been major sell signals, until the choppy action in the indicator during February and March finally broke down. The bearish crossover in June turned out to be a better buying opportunity. Friday's negative reversal sticks out like a sore thumb so that's a technical headwind and maybe a top?
The S-fund (DWCPF) gave back all of Friday's gains yesterday as the disappointment in the small caps continues. The chart hasn't broken yet but it looks like it could go either way with that bear flag looming, but that rounded low is still holding.
The EFA (I-fund) was up modestly but it too has a bearish flag glaring at us. The gap above is still open and it could try to fill that first.
BND (bonds / F-fund) tanked for a second straight day and it was likely because of what we talked about with the 10-year yield above - debate related. But technically it is coming into some decent support and the Fed is due to cut rates so I wouldn't be surprised if this channel holds, or maybe the open gap by 71 gets filled first.
Thanks so much for reading! We'll see you back here tomorrow.
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.
