Stocks bounced back on a Turnaround Tuesday and in the case of the S&P 500, it gained back almost all of Monday's losses already. That's the good news. The bad news is the day's highs filled in the overhead open gap and that could act as some resistance. After the bell some weak earnings from Google had the futures backing off already. Bonds were up as yields fell yesterday, and the dollar came tumbling back down after a two day tariff triggered rally.
You can see the latest updated TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
This may be a quick one today because there is a lot in limbo as we head into Wednesday.
We got our Turnaround Tuesday after Monday's positive reversal, so that technical analysis tendency worked, but we also saw gaps get filled on the upside which means there could be resistance to deal with.
Let's get right to the SPY (C-fund) and the DWCPF (S-fund) charts to show the mixed signals we are getting right now. Both have relatively clean bulls flags, and those are always good to see. But we also know how overhead open gaps are a draw, and can act as resistance once filled. Both were basically filled at yesterday's highs.
What happens next is usually either a gap up above the resistance, or a pullback as the resistance holds.
Palantir's strong earnings and big rally was a nice wind at the backs of the indices yesterday as it gained 24%, but it also gave a boost to the AI stocks in general, helping the Nasdaq lead the way yesterday with a 1.35% gain. But Palantir is just the 52nd highest weighted stock in the S&P 500. Alphabet (Google) is part of the Magnificent 7 and its number six on that weighted list, so both the S&P 500 and the Nasdaq will have a headwind today, unless something happens between now (Tuesday evening) and the opening bell, because Alphabet was down sharply after hours, taking the S&P and Nasdaq futures with them.
Bond yields opened higher and closed lower for a negative reversal day. That helped small caps and of course the F-fund which almost always goes up when yields go down. There is some decent support at the recent lows in the 10-year Yield ($TNX) but if this can fall below 4.5%, it could go down sharply. I'm not sure what would cause that considering some of the strong economic data we've gotten recently, in particular the 3.9% Q1 GDP estimate from the Atlanta Fed, but we have a jobs report on Friday that could make or break the situation.
The dollar was slammed after Monday's semi-negative reversal. This of course helps prices move up, and as always the I-fund was the big beneficiary of the weak dollar. It led the funds with a gain of over 1% on the day.
As I said, the January jobs report comes out on Friday and Amazon reports Thursday after the bell, so we'll have to just see if Google is a drag on the entire market or if investors ignore them and look forward. Tariffs are still in the air and we know how much that news can jerk the indices around, so it's tough to get comfortable in any allocation.
The S&P 500 (C-fund) and DWCPF (S-fund) charts were addressed up top, flags, gaps, and all..
ACWX (the I-fund tracking index) was up 1.38% yesterday and the I-fund was given a gain of 1.12%. It didn't take long for this to bounce right back out of that descending trading channel. Tariffs will be a big influence on the dollar, which is a big influence on the I-fund, so this fund will be very headline driven.
BND (bonds / F-fund) also bounced back after yet another successful test of the 50-day EMA. With 7 straight closes above that average, the two open gaps below are remaining unfilled. Resistance is overhead and gaps are below so this is going to get tested fairly soon.
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
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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You can see the latest updated TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
This may be a quick one today because there is a lot in limbo as we head into Wednesday.
We got our Turnaround Tuesday after Monday's positive reversal, so that technical analysis tendency worked, but we also saw gaps get filled on the upside which means there could be resistance to deal with.
Let's get right to the SPY (C-fund) and the DWCPF (S-fund) charts to show the mixed signals we are getting right now. Both have relatively clean bulls flags, and those are always good to see. But we also know how overhead open gaps are a draw, and can act as resistance once filled. Both were basically filled at yesterday's highs.
What happens next is usually either a gap up above the resistance, or a pullback as the resistance holds.
Palantir's strong earnings and big rally was a nice wind at the backs of the indices yesterday as it gained 24%, but it also gave a boost to the AI stocks in general, helping the Nasdaq lead the way yesterday with a 1.35% gain. But Palantir is just the 52nd highest weighted stock in the S&P 500. Alphabet (Google) is part of the Magnificent 7 and its number six on that weighted list, so both the S&P 500 and the Nasdaq will have a headwind today, unless something happens between now (Tuesday evening) and the opening bell, because Alphabet was down sharply after hours, taking the S&P and Nasdaq futures with them.
Bond yields opened higher and closed lower for a negative reversal day. That helped small caps and of course the F-fund which almost always goes up when yields go down. There is some decent support at the recent lows in the 10-year Yield ($TNX) but if this can fall below 4.5%, it could go down sharply. I'm not sure what would cause that considering some of the strong economic data we've gotten recently, in particular the 3.9% Q1 GDP estimate from the Atlanta Fed, but we have a jobs report on Friday that could make or break the situation.
The dollar was slammed after Monday's semi-negative reversal. This of course helps prices move up, and as always the I-fund was the big beneficiary of the weak dollar. It led the funds with a gain of over 1% on the day.
As I said, the January jobs report comes out on Friday and Amazon reports Thursday after the bell, so we'll have to just see if Google is a drag on the entire market or if investors ignore them and look forward. Tariffs are still in the air and we know how much that news can jerk the indices around, so it's tough to get comfortable in any allocation.
The S&P 500 (C-fund) and DWCPF (S-fund) charts were addressed up top, flags, gaps, and all..
ACWX (the I-fund tracking index) was up 1.38% yesterday and the I-fund was given a gain of 1.12%. It didn't take long for this to bounce right back out of that descending trading channel. Tariffs will be a big influence on the dollar, which is a big influence on the I-fund, so this fund will be very headline driven.
BND (bonds / F-fund) also bounced back after yet another successful test of the 50-day EMA. With 7 straight closes above that average, the two open gaps below are remaining unfilled. Resistance is overhead and gaps are below so this is going to get tested fairly soon.
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
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.
