The indices tried to be mixed yesterday, which has been the trend for a long time, but the late buying just barely pushed the Dow into positive territory while the S&P 500 and the Nasdaq both posted modest gains. The Nasdaq broke a 2-day losing streak with its 51-point gain, but once again there were more down issues than up on the index. Small caps lagged a bit but also rallied from from early bigger losses... again.
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The PPI, Producer Price Index, came in a little higher than expected sparking some inflation concerns again, but that lasted about 30 minutes into the trading day. You can see from those three thumb nail shots of the big three indices that the day started out with some selling but it didn't take long for the buyers to do their thing.
I am sorry to do this to you again. I am actually boring myself having to write this same story virtually every day, but we continue to get rotational action where the strength in the indices seem to switch from day to day while the S&P 500 grinds higher. Yet internally, the numbers don't always align with what the indices are doing.
Yesterday both the NYSE and Nasdaq had more issues down than up, and the NYSE share volume was actually very negative, yet you see all of the green in those big three. The Nasdaq once again saw a large number of 52-week lows (149), which seems very unusual for an index at an all time high. We should start seeing signs of Titanic and Hindenburg Omen warnings that flash when we see high levels of both new highs and new lows on the same days.
The 10-year yield moved up again, closing above the 44-day average for the first time in two months. It has also climbed above two resistance lines, with one more just above the current level near 1.4%.
We're still a couple of weeks away from the Jackson Hole Economic Symposium so we could have some slow action in the interim. Often slow action is a bullish time for stocks, but it could also create volatility on any unexpected eventful headlines.
The S&P 500 (C-fund) made another new high and it feels as if the bears have gone to their summer vacation homes and left the bulls to rule the roost. You can see that resistance is in play, but it is rising along with the index. Sometimes a new high means the prior high will act as a support area, like we saw in late July and into August, but sometimes that old high fails to hold and you get a quick pullback. As I mentioned the other day, we've seen a test of the 50-day EMA in every month this year except April... and so far August.
The DWCPF (S-fund) once again came back from an early loss to close at the day's highs and post a small gain. It remains below that key red resistance line, but has been able to hover above the 50-day EMA for more than three weeks now.
The EFA (EAFE Index / I-fund) was down slightly with a rebound in the dollar yesterday. There's a small open gap just below Thursday's low, and there is a potential for some double top resistance near 81.50. This one has come a long way since the July low and may need more consolidating before it breaks out.
The Dow Transportation Index followed through on Wednesday's big rally to tack on a small gain. The action has been positive as it overtook the 100 and 50 day averages, but that could be some kind of bearish flag -- or a bottom if it can take out the top of that flag.
The High Yield Corporate Bonds bounced back from its 2-day trip below the 50-day EMA. It is possibly in a new descending trading channel so we'll see how it deals with the top of that channel if it moves higher from here. But so far, like the the pullback in July and May, it seems to have weathered the breakdown of the 50-day average.
The BND (bonds / F-fund) was flat on Thursday despite yields moving slightly higher. The 50-day EMA held for a third straight day so the trend is still positive.
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 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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The PPI, Producer Price Index, came in a little higher than expected sparking some inflation concerns again, but that lasted about 30 minutes into the trading day. You can see from those three thumb nail shots of the big three indices that the day started out with some selling but it didn't take long for the buyers to do their thing.
I am sorry to do this to you again. I am actually boring myself having to write this same story virtually every day, but we continue to get rotational action where the strength in the indices seem to switch from day to day while the S&P 500 grinds higher. Yet internally, the numbers don't always align with what the indices are doing.
Yesterday both the NYSE and Nasdaq had more issues down than up, and the NYSE share volume was actually very negative, yet you see all of the green in those big three. The Nasdaq once again saw a large number of 52-week lows (149), which seems very unusual for an index at an all time high. We should start seeing signs of Titanic and Hindenburg Omen warnings that flash when we see high levels of both new highs and new lows on the same days.
The 10-year yield moved up again, closing above the 44-day average for the first time in two months. It has also climbed above two resistance lines, with one more just above the current level near 1.4%.
We're still a couple of weeks away from the Jackson Hole Economic Symposium so we could have some slow action in the interim. Often slow action is a bullish time for stocks, but it could also create volatility on any unexpected eventful headlines.
The S&P 500 (C-fund) made another new high and it feels as if the bears have gone to their summer vacation homes and left the bulls to rule the roost. You can see that resistance is in play, but it is rising along with the index. Sometimes a new high means the prior high will act as a support area, like we saw in late July and into August, but sometimes that old high fails to hold and you get a quick pullback. As I mentioned the other day, we've seen a test of the 50-day EMA in every month this year except April... and so far August.
The DWCPF (S-fund) once again came back from an early loss to close at the day's highs and post a small gain. It remains below that key red resistance line, but has been able to hover above the 50-day EMA for more than three weeks now.
The EFA (EAFE Index / I-fund) was down slightly with a rebound in the dollar yesterday. There's a small open gap just below Thursday's low, and there is a potential for some double top resistance near 81.50. This one has come a long way since the July low and may need more consolidating before it breaks out.
The Dow Transportation Index followed through on Wednesday's big rally to tack on a small gain. The action has been positive as it overtook the 100 and 50 day averages, but that could be some kind of bearish flag -- or a bottom if it can take out the top of that flag.
The High Yield Corporate Bonds bounced back from its 2-day trip below the 50-day EMA. It is possibly in a new descending trading channel so we'll see how it deals with the top of that channel if it moves higher from here. But so far, like the the pullback in July and May, it seems to have weathered the breakdown of the 50-day average.
The BND (bonds / F-fund) was flat on Thursday despite yields moving slightly higher. The 50-day EMA held for a third straight day so the trend is still positive.
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 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.
