Volatility was the word on Thursday as stocks opened higher and made their highs of the day in early trading, then sank as the day went on and closed near the lows of the day. Dow was up more than 250-points at the highs, and down nearly 500 at the lows - closing with a loss of 406-points. The Nasdaq is down 9.6% from its all time highs, which was made earlier this month. Is that enough? The rest of the market seems to follow, so whether that 10% is enough or not may be the key.
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The market is currently in a bull market after the devastation earlier this year. Some bull markets are orderly. Some not so much. 2017 was a quiet bull market that behaved rather well. Every pullback down to the 50-day EMA, or in the vicinity, held.
Then we had 2018. It got a little more choppy. We had a couple of steep declines, both of which recovered in a reasonable amount of time. The decline later in the year rebounded sharply in 2019. The 200-day EMA came into play several times with the 50-day EMA only holding about half the time.
Last year was another bullish one for stocks but the 200-day EMA was again very much a part of the pullbacks - but it held.
So that's where we are now. The 50-day EMA is being tested now and basically holding so far on the S&P500. In many cases during a choppy market the 50 and 200-day EMAs are not that far apart. The question is whether this pullback will move down to the 200-day EMA, because the 200 EMA is a long way down as you'll see in the chart below.
The S&P 500 (C-fund) bounced off the 50-day EMA on Wednesday, and went back down to test it again on Thursday. The last time this happened was in June, as you can see below, and both tests held back then. The 200-day EMA is a long ay down so the bulls really need that 50-day EMA to hold.
The DWCPF (S-fund) has been falling below its 50-day EMA but there is some rising support near 1500.
The High Yield Corporate Bond Fund ETF created a negative reversal day, and nearly an outside reversal day - which would have been more negative. But it remains in a big flag-like trading channel that needs to hold near 84, or at worst, the 50-day EMA just below that.
A Volatility Index was up yesterday but surprisingly it closed below 30 again despite the wide swings in recent days. The 200-day EMA held as support.
BND (F-fund) was down early but rebounded when stocks started to tumble on Thursday. It did close above the 50-day EMA, but below that short-term support line.
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
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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[TD="align: center"] Daily TSP Funds Return
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[TD][/TD]
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The market is currently in a bull market after the devastation earlier this year. Some bull markets are orderly. Some not so much. 2017 was a quiet bull market that behaved rather well. Every pullback down to the 50-day EMA, or in the vicinity, held.
Then we had 2018. It got a little more choppy. We had a couple of steep declines, both of which recovered in a reasonable amount of time. The decline later in the year rebounded sharply in 2019. The 200-day EMA came into play several times with the 50-day EMA only holding about half the time.
Last year was another bullish one for stocks but the 200-day EMA was again very much a part of the pullbacks - but it held.
So that's where we are now. The 50-day EMA is being tested now and basically holding so far on the S&P500. In many cases during a choppy market the 50 and 200-day EMAs are not that far apart. The question is whether this pullback will move down to the 200-day EMA, because the 200 EMA is a long way down as you'll see in the chart below.
The S&P 500 (C-fund) bounced off the 50-day EMA on Wednesday, and went back down to test it again on Thursday. The last time this happened was in June, as you can see below, and both tests held back then. The 200-day EMA is a long ay down so the bulls really need that 50-day EMA to hold.
The DWCPF (S-fund) has been falling below its 50-day EMA but there is some rising support near 1500.
The High Yield Corporate Bond Fund ETF created a negative reversal day, and nearly an outside reversal day - which would have been more negative. But it remains in a big flag-like trading channel that needs to hold near 84, or at worst, the 50-day EMA just below that.
A Volatility Index was up yesterday but surprisingly it closed below 30 again despite the wide swings in recent days. The 200-day EMA held as support.
BND (F-fund) was down early but rebounded when stocks started to tumble on Thursday. It did close above the 50-day EMA, but below that short-term support line.
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
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.
