Stocks were down on Thursday, the final trading day of the first quarter, which was a struggle for stocks. We got a taste of that window dressing type of trading in that final hour where the downside accelerated. The Dow ended the day down 550-points, and the big three indices were all down about a percent and a half. Bonds were up a bit and the 2/10 year yield curve did invert.
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The S&P 500 (C-fund) pulled back yesterday, and as we mentioned above, a lot of that may have had to do with the calendar. After a breakout it is not unusual to see a test of that area, so the orange moving average could be that test, although the rally was quite large and a little more backing and filling wouldn't be too much of a surprise. The 200-day EMA (blue) is also a spot that could get targeted, but not necessary, especially if the million barrels of oil being released can take the price of oil down meaningfully below $100.
Hopefully I will be in better shape next week to do a full report.
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 Biden administration announced on Thursday that they will release 1 million barrels of oil per day from the reserves to help with gasoline prices. That sent the price of oil lower so seeing stocks selling off on a day that oil fell about 5% on the day was a new twist, but there were other factors.
The semiconductor sector took a hit leading large cap techs lower, which impact the big three indices above, as well as small companies who rely on the semis for their business. The chart looks a little troubling with resistance holding and a lot of room on the downside if that channel is still in play.
The 2-year is paying more than the 10-year Treasury Note, so it's official. The 2/10 yield curve has inverted.
As we've mentioned before, almost each time we have seen an inversion, stocks actually continued to move higher and made a new high, but after peaking at those highs, a sharp decline ensued at some point weeks or months later.
Economists are quick to remind us that not every yield curve inversion led to a recession, but every recession was preceded by an inversion. But recession or not, it's the decline in the stock market that I'm concerned about, and that has been consistent - at least going back 30 years.
We get the March jobs report this morning and estimates are looking for a gain of about 500,000 jobs an an unemployment rate of 3.7%. The end of quarter (EOQ) downside yesterday may have been overdone and the futures bounced moderately right after the closing bell, so the market may be looking for a reason to get back some of that EOQ sell off, which had a lot to do with money mangers' window dressing as we talked about yesterday.
The window dressing is done and now the money managers are free to buy anything, even the dogs they may have just sold.
My back is feeling slightly better today but I don't want to push it so I'll make this brief again today (not lot of charts). A few days of rest over the weekend might be what I need. Thanks for the tips on back exercises I received. I appreciate that since I am not the type of person who goes to the doctor very often unless it's absolutely necessary.
The semiconductor sector took a hit leading large cap techs lower, which impact the big three indices above, as well as small companies who rely on the semis for their business. The chart looks a little troubling with resistance holding and a lot of room on the downside if that channel is still in play.
The 2-year is paying more than the 10-year Treasury Note, so it's official. The 2/10 yield curve has inverted.
As we've mentioned before, almost each time we have seen an inversion, stocks actually continued to move higher and made a new high, but after peaking at those highs, a sharp decline ensued at some point weeks or months later.
Economists are quick to remind us that not every yield curve inversion led to a recession, but every recession was preceded by an inversion. But recession or not, it's the decline in the stock market that I'm concerned about, and that has been consistent - at least going back 30 years.
We get the March jobs report this morning and estimates are looking for a gain of about 500,000 jobs an an unemployment rate of 3.7%. The end of quarter (EOQ) downside yesterday may have been overdone and the futures bounced moderately right after the closing bell, so the market may be looking for a reason to get back some of that EOQ sell off, which had a lot to do with money mangers' window dressing as we talked about yesterday.
The window dressing is done and now the money managers are free to buy anything, even the dogs they may have just sold.
My back is feeling slightly better today but I don't want to push it so I'll make this brief again today (not lot of charts). A few days of rest over the weekend might be what I need. Thanks for the tips on back exercises I received. I appreciate that since I am not the type of person who goes to the doctor very often unless it's absolutely necessary.
The S&P 500 (C-fund) pulled back yesterday, and as we mentioned above, a lot of that may have had to do with the calendar. After a breakout it is not unusual to see a test of that area, so the orange moving average could be that test, although the rally was quite large and a little more backing and filling wouldn't be too much of a surprise. The 200-day EMA (blue) is also a spot that could get targeted, but not necessary, especially if the million barrels of oil being released can take the price of oil down meaningfully below $100.
Hopefully I will be in better shape next week to do a full report.
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Thanks for reading. Have a great weekend!
Tom Crowley
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.
