Stocks were slow to get out of the gate on Tuesday morning, but it didn't take long for the bulls to step up and start tacking onto Monday's rally. The Dow gained 124-points on the day and this time small caps came along for the ride and actually led on the upside. This 2-day rally in front of today's decision on interest rates by the Fed sounds optimistic, but it could all change in the blink of an eye once that policy statement is released at 2PM ET.
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The internal numbers are looking better, rather than the market rising on a small group of big tech stocks. Advancing issues led decliners by about 2.5 to 1 on the NYSE. It wasn't quite as high on the Nasdaq but still nicely positive. Advancing share volume was also 2 to 1 or higher on the NYSE and Nasdaq.
The 10-year Treasury Yield was down early, helping the rally, but they came back to close flat, so it was refreshing to see the stock indices retain the gains despite this positive turnaround in yields.
The dollar was also up again and this looks primed for a breakout, but again, stocks dismissed it and rallied, which is either encouraging, or foolish.
The market leading Dow Transportation Index was up but slipped off its highs after hitting some possible resistance in the form of the old broken support line. It's been a nice rally off the 13,500 low but there's work to do, and a busy week in front of us.
The November 30-year seasonality chart shows us a lot more green than we saw in August, September, or October, and those three charts were certainly impacted by the weaker expectations. But can stocks rally into this stronger than average month historically? The first week is typically quite positive, as is the period surrounding Thanksgiving. It looks like there is some mid-month profit taking, or whatever was happening from the 9th through the 20th, but it doesn't look like anything serious.
Chart provided courtesy of www.sentimentrader.com
The two day rally of the oversold market has been encouraging, but the outside influences are about to get louder.
Day two of the FOMC meeting is today with the policy statement and decision on interest rates being released at 2 PM ET. I'll refrain from trying to predict what is going to happen. It's always a guessing game and the volatility picks up dramatically after the release but it takes a day or two for the market to sort things out so try not to get sucked in by the initial knee-jerk reaction.
AMD reported after the bell yesterday and their guidance was disappointing. Apple, reports earnings after the bell on Thursday, and we'll get the October jobs report on Friday.
The S&P 500 (C-fund) pushed higher for a second day and as impressive as it felt, the index is barely where it was at last Wednesday's close. Prior relief rallies came under similar circumstances (blue boxes) but there were a few two day bounces that quickly failed (red.) Trading volume was slightly higher than during prior bounces, so that's a good sign, but I still don't see any signs of a high volume capitulation low. So, the action is decent, but still questionable.
DWCPF (S-fund) finally had a good day after underperforming for a while now. It made it back up to some old broken support and actually managed to close above it, which is a must technically. A move to 1650 would be a reasonable, playable bounce, but as I said, the action is still questionable and how long relief rallies last may depend on the Fed, Apple's earnings, and perhaps the jobs report on Friday.
EFA (I-fund) has also had a respectable 2-day rebound, but the chart remains in a descending channel with resistance falling quickly.
BND (bonds / F-fund) was down slightly as yields reversed higher to close near their highs of the day -- Bond prices move counter to yields. The chart is testing its descending resistance now and the Fed could either flip this back on its head again, or push this above the top of the channel, which would be interesting as far as how stocks would react.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
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
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
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 internal numbers are looking better, rather than the market rising on a small group of big tech stocks. Advancing issues led decliners by about 2.5 to 1 on the NYSE. It wasn't quite as high on the Nasdaq but still nicely positive. Advancing share volume was also 2 to 1 or higher on the NYSE and Nasdaq.
The 10-year Treasury Yield was down early, helping the rally, but they came back to close flat, so it was refreshing to see the stock indices retain the gains despite this positive turnaround in yields.
The dollar was also up again and this looks primed for a breakout, but again, stocks dismissed it and rallied, which is either encouraging, or foolish.
The market leading Dow Transportation Index was up but slipped off its highs after hitting some possible resistance in the form of the old broken support line. It's been a nice rally off the 13,500 low but there's work to do, and a busy week in front of us.
The November 30-year seasonality chart shows us a lot more green than we saw in August, September, or October, and those three charts were certainly impacted by the weaker expectations. But can stocks rally into this stronger than average month historically? The first week is typically quite positive, as is the period surrounding Thanksgiving. It looks like there is some mid-month profit taking, or whatever was happening from the 9th through the 20th, but it doesn't look like anything serious.
Chart provided courtesy of www.sentimentrader.com
The two day rally of the oversold market has been encouraging, but the outside influences are about to get louder.
Day two of the FOMC meeting is today with the policy statement and decision on interest rates being released at 2 PM ET. I'll refrain from trying to predict what is going to happen. It's always a guessing game and the volatility picks up dramatically after the release but it takes a day or two for the market to sort things out so try not to get sucked in by the initial knee-jerk reaction.
AMD reported after the bell yesterday and their guidance was disappointing. Apple, reports earnings after the bell on Thursday, and we'll get the October jobs report on Friday.
The S&P 500 (C-fund) pushed higher for a second day and as impressive as it felt, the index is barely where it was at last Wednesday's close. Prior relief rallies came under similar circumstances (blue boxes) but there were a few two day bounces that quickly failed (red.) Trading volume was slightly higher than during prior bounces, so that's a good sign, but I still don't see any signs of a high volume capitulation low. So, the action is decent, but still questionable.
DWCPF (S-fund) finally had a good day after underperforming for a while now. It made it back up to some old broken support and actually managed to close above it, which is a must technically. A move to 1650 would be a reasonable, playable bounce, but as I said, the action is still questionable and how long relief rallies last may depend on the Fed, Apple's earnings, and perhaps the jobs report on Friday.
EFA (I-fund) has also had a respectable 2-day rebound, but the chart remains in a descending channel with resistance falling quickly.
BND (bonds / F-fund) was down slightly as yields reversed higher to close near their highs of the day -- Bond prices move counter to yields. The chart is testing its descending resistance now and the Fed could either flip this back on its head again, or push this above the top of the channel, which would be interesting as far as how stocks would react.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
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
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
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.
