Another day of tumbling yields as bond prices rally and investors seem to be moving more toward safety. Tech and the small caps have been lagging and did so again on Wednesday as the Nasdaq and the Russell 2000 lost 1% each, while the Dow, filled with more defensive names, was up again. The dollar was up but it is still more than 9% off the fall highs.
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Just a quick note in case you don't make it to the bottom - the TSP and the stock market are both closed on Friday.
Yields were down sharply again as the 10-year Treasury moved below 3.3% yesterday, falling below the March 24 fake out low. It may be at some support here and descending "F" flags do tend to break to the upside eventually, but these F-flags can drag out for a while before breaking one way or the other.
Investors are running to safety with bonds rallying again and nearly breaking out, gold is nearing all time highs, and the defensive utilities sector blasted off yesterday to a new high.
The banks can't seem to catch a bid, although they have not made a new low and have been moving sideways for almost a month now. Schwab (not shown), which I talked about the other day, did make a new closing low yesterday and looks very vulnerable. The 2nd chart is the Dow Transportation Index which is filling in a bear flag and also looking over a precipice at a breakdown.
And again, small caps had a nice run last week, but the bear flag is back in business and they remain in a downtrend.
Investor sentiment got a lot more bearish this week compared to last week's giddiness. Can it be that this week's weakness is all be part of the typical pre-holiday trend reversal that will correct itself after the three day weekend?
The stock market is closed on Friday for Easter weekend and the TSP will not post prices nor process transactions (IFTs) that day, so I will not post a daily commentary on Friday. However, we will still get the March jobs report on Friday and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%.
The S&P 500 (C-fund) was down on Wednesday but it held up well and closed off the early lows. This chart looks much better than the small caps or Transports, which are considered market leaders, so the S&P could also be due for a rest. It would be really nice to see that open gap get filled below 4000 - only because if the chart continues higher without filling it, we would have to continue to look over our shoulder wondering if and when it will eventually come back and fill it down the road as is typically the case. Let's get it over with, although that's quite drop from the current level.
The DWCPF (S-fund) looks bad. It has come back from some bad formations / chart patterns before so I suppose it could do it again, but this would likely need the help of a bounce back from the banking sector, and we just don't know if that will happen anytime soon.
The EFA (I-fund) finally took a day off from its recent parabolic move higher. The dead cat bounce in the dollar was part of the problem yesterday. This chart remains in the rising channel but it is at a double top with plenty of open gaps below to fill, so it could be vulnerable in the short-term.
BND (bonds / F-fund) gapped up and rallied strongly, even though it closed well off its highs This could be a short-term negative reversal forming near a double top, and it could also come back to test the rising support. Bonds look good but short-term there could be some backing and filling.
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 so much for reading. Enjoy your holiday 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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Just a quick note in case you don't make it to the bottom - the TSP and the stock market are both closed on Friday.
Yields were down sharply again as the 10-year Treasury moved below 3.3% yesterday, falling below the March 24 fake out low. It may be at some support here and descending "F" flags do tend to break to the upside eventually, but these F-flags can drag out for a while before breaking one way or the other.
Investors are running to safety with bonds rallying again and nearly breaking out, gold is nearing all time highs, and the defensive utilities sector blasted off yesterday to a new high.
The banks can't seem to catch a bid, although they have not made a new low and have been moving sideways for almost a month now. Schwab (not shown), which I talked about the other day, did make a new closing low yesterday and looks very vulnerable. The 2nd chart is the Dow Transportation Index which is filling in a bear flag and also looking over a precipice at a breakdown.
And again, small caps had a nice run last week, but the bear flag is back in business and they remain in a downtrend.
Investor sentiment got a lot more bearish this week compared to last week's giddiness. Can it be that this week's weakness is all be part of the typical pre-holiday trend reversal that will correct itself after the three day weekend?
The stock market is closed on Friday for Easter weekend and the TSP will not post prices nor process transactions (IFTs) that day, so I will not post a daily commentary on Friday. However, we will still get the March jobs report on Friday and expectations are looking for a gain of 245,000 jobs and an unemployment rate of 3.6%.
The S&P 500 (C-fund) was down on Wednesday but it held up well and closed off the early lows. This chart looks much better than the small caps or Transports, which are considered market leaders, so the S&P could also be due for a rest. It would be really nice to see that open gap get filled below 4000 - only because if the chart continues higher without filling it, we would have to continue to look over our shoulder wondering if and when it will eventually come back and fill it down the road as is typically the case. Let's get it over with, although that's quite drop from the current level.
The DWCPF (S-fund) looks bad. It has come back from some bad formations / chart patterns before so I suppose it could do it again, but this would likely need the help of a bounce back from the banking sector, and we just don't know if that will happen anytime soon.
The EFA (I-fund) finally took a day off from its recent parabolic move higher. The dead cat bounce in the dollar was part of the problem yesterday. This chart remains in the rising channel but it is at a double top with plenty of open gaps below to fill, so it could be vulnerable in the short-term.
BND (bonds / F-fund) gapped up and rallied strongly, even though it closed well off its highs This could be a short-term negative reversal forming near a double top, and it could also come back to test the rising support. Bonds look good but short-term there could be some backing and filling.
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 so much for reading. Enjoy your holiday 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.
