The holiday shortened week started off with a bang and losses across the board, although the international stocks moved up to give the I-fund a gain. The Dow lost a modest 64-points but big tech of the Nasdaq was hit hard and that spread into the S&P 500 and perhaps was responsible for the contagion into the small caps. Bonds were up as yields pulled back, and the dollar was down helping the I-fund.
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Earnings continue to flow and there wasn't a whole lot of good news after the bell yesterday as Palo Alto Networks, one of this year's high flyers, was getting crushed after hours. But none of the recent reports have been huge market movers, but today we will get the final Magnificent 7 stock reporting after the closing bell - the tech darling Nvidia, which has been soaring all year. If earnings aren't great there is a vacuum of space between where it closed yesterday and some potential support areas, and the stock market won't like that. NVDA was actually down sharply yesterday (-4.35%) in front of earnings so there are some nerves out there. The surprise would be another move higher, but don't discount the unexpected. The market likes to get people leaning the wrong way. It looks like a coin flip to me.
Yields and the dollar were down sharply in early trading yesterday but both climbed their way off the lows to close with only small losses. Both remain in ascending trading channels and we have to respect the trend.
Both of those positive trends above are headwinds to the S and I-funds. DWCPF (S-fund) lagged yesterday and that created a failed breakout after the gap down open and 1.2% loss. The chart formation is still fairly bullish but now that the old resistance failed to hold as support, there is more of a chance that this could pull back to test the bottom of the formation which is just above the 50-day EMA; that is if the 20-day EMA fails in the coming days first. There's also some possible support at yesterday's lows which was the peak in January.
The dollar's weakness helped the I-fund as EFA was actually up nicely on the day and made a new all-time high. That was an impressive move considering the weakness in the US markets, and after Friday's failed breakout.
The historically weaker half of February did not disappoint those who use the seasonality charts for clues. Unfortunately that weakness continues into about mid-March before things improve in that department.
The S&P 500 (C-fund) pulled back yesterday and is doing a retest of the 20-day EMA, and perhaps a retest of last week's low which would take out the 20-day EMA. If that fails, then 4900 followed by the 50-day EMA near 4824 are the next support lines in the sand. The PMO indicator is not only making a lower high while the S&P made a higher high, but yesterday it crossed below its moving average.
BND (bonds / F-fund) was up slightly but the 50-day EMA held as resistance. It remains in a bullish looking flag, but it's getting a little too long, and with it closing below the 50-day EMA for 4 of the last 5 days, I am getting concerned that the February 1st high could have been a longer term peak. I wasn't thinking that several days ago, but now I'm concerned.
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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Earnings continue to flow and there wasn't a whole lot of good news after the bell yesterday as Palo Alto Networks, one of this year's high flyers, was getting crushed after hours. But none of the recent reports have been huge market movers, but today we will get the final Magnificent 7 stock reporting after the closing bell - the tech darling Nvidia, which has been soaring all year. If earnings aren't great there is a vacuum of space between where it closed yesterday and some potential support areas, and the stock market won't like that. NVDA was actually down sharply yesterday (-4.35%) in front of earnings so there are some nerves out there. The surprise would be another move higher, but don't discount the unexpected. The market likes to get people leaning the wrong way. It looks like a coin flip to me.
Yields and the dollar were down sharply in early trading yesterday but both climbed their way off the lows to close with only small losses. Both remain in ascending trading channels and we have to respect the trend.
Both of those positive trends above are headwinds to the S and I-funds. DWCPF (S-fund) lagged yesterday and that created a failed breakout after the gap down open and 1.2% loss. The chart formation is still fairly bullish but now that the old resistance failed to hold as support, there is more of a chance that this could pull back to test the bottom of the formation which is just above the 50-day EMA; that is if the 20-day EMA fails in the coming days first. There's also some possible support at yesterday's lows which was the peak in January.
The dollar's weakness helped the I-fund as EFA was actually up nicely on the day and made a new all-time high. That was an impressive move considering the weakness in the US markets, and after Friday's failed breakout.
The historically weaker half of February did not disappoint those who use the seasonality charts for clues. Unfortunately that weakness continues into about mid-March before things improve in that department.
The S&P 500 (C-fund) pulled back yesterday and is doing a retest of the 20-day EMA, and perhaps a retest of last week's low which would take out the 20-day EMA. If that fails, then 4900 followed by the 50-day EMA near 4824 are the next support lines in the sand. The PMO indicator is not only making a lower high while the S&P made a higher high, but yesterday it crossed below its moving average.
BND (bonds / F-fund) was up slightly but the 50-day EMA held as resistance. It remains in a bullish looking flag, but it's getting a little too long, and with it closing below the 50-day EMA for 4 of the last 5 days, I am getting concerned that the February 1st high could have been a longer term peak. I wasn't thinking that several days ago, but now I'm concerned.
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.
