Stocks were down slightly to modestly for most of the day on Tuesday in front of this morning's key CPI inflation report, but there was a late sell-off reportedly triggered by a "fake" leaked CPI number that was was floating around before the close that was apparently not very bullish, but Bureau of Labor Statistics dismissed this as not valid. If that is true, we will know soon enough on Wednesday. The Dow ended the day with a 193-point loss and the S&P 500 and Nasdaq fell almost 1%. Small caps held up a little better. The price of oil fell sharply and bond yields slipped back again helping the F-fund pick up 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]
[TD="bgcolor: #eeeeee"][/TD]
The market was very tentative in front of today's CPI number and that fake leak of the number in the afternoon, but with yields pulling back and the price of oil plummeting on Tuesday - down to a multi-month low, investors could have a reason to be optimistic since lower oil / gas and other commodity prices, plus lower yields could lift a weight off the shoulders of consumers who are getting strapped by higher prices and rising interest and mortgage rates.
The market could look for a reason to rally after six months of selling, and these lower prices and yields could be opening a door, but it will still have to deal with today's CPI report, the plethora of earnings due out in the next couple of weeks, and the FOMC meeting at the end of the month with a Fed determined to tame inflation with higher rates.
At this point it is a small window because momentum, the trend, and the chart formations still favor the bears unless we hear some news that can quickly turn things around and mend those broken charts.
Again, I am defensive but remaining nimble in case there is some kind of shift. Whether that shift is from economic data, the Fed, or just an improvement in the charts doesn't matter, although a Fed shift in monetary policy would certainly be the big one, but there doesn't seem to be any sign of that yet. As I mentioned the other day, the Fed is very concerned about repeating the mistakes made in the 1970's when they stopped cutting rates too quickly and inflation came back stronger than ever back then.
The S&P 500 (C-fund) was down but there wasn't much of a change in the technical picture as the 20-day EMA and the bear flag continue to hold. There's an open gap above and a potential bear flag break down below if stocks fall again today. There's a lot at stake with today's CPI if volatility spikes.
The Dow Transportation index, a good indicator for the strength of the economy, needs some help quickly as it flirts with another breakdown.
The DWCPF (S-fund) held up a little better with a 0.54% loss, but the technical picture is still very similar to the S&P 500 chart. Support is trying to hold it up, but the chart formations look ominous if those bear flags continue to break down as they have been.
EFA (I-fund) was flat on the day as the dollar finally stopped going up for a day. The chart doesn't look too great though, as it filled a small overhead open gap (blue) and retreated back down, closing near the lows of the day.
BND (Bonds / F-fund) was up but closed off its high after another failed attempt to move above the 50-day EMA. It's in a bullish looking rising channel right now but if it fails here, the bear market will continue. A couple of closes back above the 50-day EMA could signal a shift for bonds to a more bullish formation.
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. 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]
[TD="bgcolor: #eeeeee"][/TD]
The market was very tentative in front of today's CPI number and that fake leak of the number in the afternoon, but with yields pulling back and the price of oil plummeting on Tuesday - down to a multi-month low, investors could have a reason to be optimistic since lower oil / gas and other commodity prices, plus lower yields could lift a weight off the shoulders of consumers who are getting strapped by higher prices and rising interest and mortgage rates.
The market could look for a reason to rally after six months of selling, and these lower prices and yields could be opening a door, but it will still have to deal with today's CPI report, the plethora of earnings due out in the next couple of weeks, and the FOMC meeting at the end of the month with a Fed determined to tame inflation with higher rates.
At this point it is a small window because momentum, the trend, and the chart formations still favor the bears unless we hear some news that can quickly turn things around and mend those broken charts.
Again, I am defensive but remaining nimble in case there is some kind of shift. Whether that shift is from economic data, the Fed, or just an improvement in the charts doesn't matter, although a Fed shift in monetary policy would certainly be the big one, but there doesn't seem to be any sign of that yet. As I mentioned the other day, the Fed is very concerned about repeating the mistakes made in the 1970's when they stopped cutting rates too quickly and inflation came back stronger than ever back then.
The S&P 500 (C-fund) was down but there wasn't much of a change in the technical picture as the 20-day EMA and the bear flag continue to hold. There's an open gap above and a potential bear flag break down below if stocks fall again today. There's a lot at stake with today's CPI if volatility spikes.
The Dow Transportation index, a good indicator for the strength of the economy, needs some help quickly as it flirts with another breakdown.
The DWCPF (S-fund) held up a little better with a 0.54% loss, but the technical picture is still very similar to the S&P 500 chart. Support is trying to hold it up, but the chart formations look ominous if those bear flags continue to break down as they have been.
EFA (I-fund) was flat on the day as the dollar finally stopped going up for a day. The chart doesn't look too great though, as it filled a small overhead open gap (blue) and retreated back down, closing near the lows of the day.
BND (Bonds / F-fund) was up but closed off its high after another failed attempt to move above the 50-day EMA. It's in a bullish looking rising channel right now but if it fails here, the bear market will continue. A couple of closes back above the 50-day EMA could signal a shift for bonds to a more bullish formation.
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. 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.
