A choppy start to the new week, with some late buying to push the big three indices into the green. Friday's laggards were Monday's winners, and vice versa. The Nasdaq led with a 1% gain yesterday and the S&P 500 saw a late rally to push it to the highs of the day. Small caps and the I-fund lagged as higher yields and a stronger dollar put some pressure on them. Bonds were down and testing recent lows.
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The action was mixed until a late rally took the Dow and the S-fund into positive territory, but the Russell 2000 did close with a moderate loss. Internally it wasn't quite as good as all of those green numbers above might suggest. There were more stocks down on the NYSE and the Nasdaq than were up. Volume was more negative on the NYSE while some big tech buying helped put the Nasdaq share volume only slightly in favor of advancers, despite the indices impressive 1% gain on the day.
The Yield on the 10-year Treasury moved higher again to start the week, but backed off slightly at the double top. It's at the top of a longer term rising trading channel and could be running out of steam - or at least it may suggest that inflationary data is ready to calm down again - assuming resistance holds.
The 2/10- year Treasury Yield curve became more inverted yesterday as both yields moving higher. The 2-year year is now flirting with 5%, while the 10-year approached recent highs at 4.2%, is still 0.77% below it.
The dollar gapped up higher yesterday morning, quickly filled the gap, then ran right back up and closed at a new 2023 high. A stronger dollar will put pressure on pricing in general, but as you probably know by now, it really negatively impacts overseas stock prices of the I-fund.
The longer term chart of the dollar shows that it is still well off the 2022 highs, and it was the move from 27 to over 30 last year that took place during the weakness of the bear market last year. So, as this starts to creep above recent highs, the bulls are going to probably need to see this peak here soon to keep the 2023 bull market in stocks going.
We will get the monthly retail sales numbers before the opening bell today, and earnings from some of the major retail players will also come in this week. It could set the tone for the week, but only because there isn't otherwise a whole lot going on this week.
The S&P 500 (C-fund) started the week with a nice gain, not only holding at a decent support area, but also a possible break above the short-term descending reliance line off the top. It's just one day and without some follow through it will mean nothing, but the bulls have their chance to take back control. There could be a challenge if and when this makes it up to that open gap above, but it may be too early to worry about that.
DWCPF (S-fund) was up slightly after spending most of the day in negative territory. This found support at a key level as well but it remains below resistance so the bulls have some work to do here at this pivot point.
EFA (I-fund) lagged the US market and the gap up in the dollar, as we talked about above, was one of the main culprits. The bear flag in blue broke down yesterday, as bear flags often so, and it did find some support at the first test of the bottom of the wide trading channel. The dollar made new recent highs and that could open the door to another leg higher so the I-fund, if it can't hold support, could be vulnerable here.
BND (Bonds / F-fund) fell to test the lows from earlier in the month as the 10-year Treasury Yields remains above 4%. There's some support here near 71 but that's about the best I can say about this chart at this time.
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
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Daily Market Commentary Archives
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Thanks so much for reading! We'll see you back here tomorrow.
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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The action was mixed until a late rally took the Dow and the S-fund into positive territory, but the Russell 2000 did close with a moderate loss. Internally it wasn't quite as good as all of those green numbers above might suggest. There were more stocks down on the NYSE and the Nasdaq than were up. Volume was more negative on the NYSE while some big tech buying helped put the Nasdaq share volume only slightly in favor of advancers, despite the indices impressive 1% gain on the day.
The Yield on the 10-year Treasury moved higher again to start the week, but backed off slightly at the double top. It's at the top of a longer term rising trading channel and could be running out of steam - or at least it may suggest that inflationary data is ready to calm down again - assuming resistance holds.
The 2/10- year Treasury Yield curve became more inverted yesterday as both yields moving higher. The 2-year year is now flirting with 5%, while the 10-year approached recent highs at 4.2%, is still 0.77% below it.
The dollar gapped up higher yesterday morning, quickly filled the gap, then ran right back up and closed at a new 2023 high. A stronger dollar will put pressure on pricing in general, but as you probably know by now, it really negatively impacts overseas stock prices of the I-fund.
The longer term chart of the dollar shows that it is still well off the 2022 highs, and it was the move from 27 to over 30 last year that took place during the weakness of the bear market last year. So, as this starts to creep above recent highs, the bulls are going to probably need to see this peak here soon to keep the 2023 bull market in stocks going.
We will get the monthly retail sales numbers before the opening bell today, and earnings from some of the major retail players will also come in this week. It could set the tone for the week, but only because there isn't otherwise a whole lot going on this week.
The S&P 500 (C-fund) started the week with a nice gain, not only holding at a decent support area, but also a possible break above the short-term descending reliance line off the top. It's just one day and without some follow through it will mean nothing, but the bulls have their chance to take back control. There could be a challenge if and when this makes it up to that open gap above, but it may be too early to worry about that.
DWCPF (S-fund) was up slightly after spending most of the day in negative territory. This found support at a key level as well but it remains below resistance so the bulls have some work to do here at this pivot point.
EFA (I-fund) lagged the US market and the gap up in the dollar, as we talked about above, was one of the main culprits. The bear flag in blue broke down yesterday, as bear flags often so, and it did find some support at the first test of the bottom of the wide trading channel. The dollar made new recent highs and that could open the door to another leg higher so the I-fund, if it can't hold support, could be vulnerable here.
BND (Bonds / F-fund) fell to test the lows from earlier in the month as the 10-year Treasury Yields remains above 4%. There's some support here near 71 but that's about the best I can say about this chart at this time.
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.
Thanks so much for reading! We'll see you back here tomorrow.
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.
