After another strong open, stocks drifted lower the rest of the day with the Dow, S&P 500, and small caps closing near the lows of the day, although the small caps did hold onto a modest gain. UnitedHealth, the heaviest weighted stock in the Dow Jones, was drag on the Dow and large cap tech helped the S&P 500, but the equal Weighted S&P 500 was down about double the loss of the S&P 500. Bonds were up with the 10-year Treasury moving down on the day.
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The PCE Prices and Personal Spending reports came in fairly close to estimates and if anything sent the futures down off their overnight highs after their release before the opening bell yesterday. It didn't seem to have that much of an impact although the dollar was up sharply for some reason.
This morning we get the August Jobs Report and that may be more impactful, especially if it doesn't come close to the estimates which are looking for a gain of 165,000 jobs and an unemployment rate of 3.6%.
I talked enough about the pre-holiday reversals but one thing I will repeat is that it is possible that yesterday and today, if down, could be the reversal from this new uptrend that started on August 18. Otherwise, maybe the relief is over - I don't know. There are a lot of indications that this new uptrend is for real, but September is a tough month for stocks and I doubt anyone is too comfortable going forward.
Yesterday the S&P 500 was down 0.16%, while the Equal Weighted S&P 500 (same 500 stocks but large cap stocks are weighted the same as the smaller companies) was down 0.35%. Not a huge difference but it also created another negative outside reversal day by a few ticks on each end.
The bounce back in the dollar contributed to the weakness in stocks yesterday, but the larger trend on UUP is still considered broken, although the new resistance line, which is the old broken support line, is rising.
The Yield on the 10-year Treasury was down slightly and may try to come down further to test the 50-day EMA as it had done a few times in previous months, but the dip in early August never got that far. The jobs report today could determine whether or not it gets tested this time around.
The Dow Transportation Index, which we mentioned yesterday had broken above its 50-day moving on Wednesday, closed back below it on Thursday as UPS and Union Pacific were the drag on the Index. It's still in the neighborhood but this market leader may be in a bear flag right now as it has not rallied off the lows as much as the broader market indices. If this breaks down it wouldn't be a good omen for the rest of the market.
September is normally a tough month for stocks, on average, and history shows that there's more trouble in the latter half of the month than the first half. A lot of the negative averages are due to some severe losses during down years over the last 30 years like in 2000, 2008, and last year. There have been some good years as well, but they aren't as common.
Chart provided courtesy of [url]www.sentimentrader.com
[/URL]
The S&P 500 (C-fund) made its highs of the day shortly after the opening bell yesterday, and closed at the lows of the day. Not the best action but after four very strong up days, it's not generally something to worry about. Pre / post holiday reversals may or may not be at play here and whether this gets pushed up toward the open gap above 4550 or pulls back toward the moving averages or the old resistance line (blue) may depend on the strength or weakness -- or the reaction to, the jobs report this morning. There is a concern that a gap fill could produce a peak for the relief rally, but it's hard to say with the light volume holiday trading we may be seeing today and into next week. The PMO crossover often pushes the chart into short-term overbought territory making a pullback -- whether minor, modest, or severe -- more likely, but it is a more bullish sign for the intermediate-term.
DWCPF (S-fund) ended the day with a gain and that 1800 area looks to be the pivot point here. Is this a breakout or the top of the right shoulder on the head and shoulder pattern, which would be bearish? Or, is that small open gap up near 1860 on the bulls' radar?
The EFA (I-fund) was down yesterday with the dollar rallying quite a bit. You can see that it is now sandwiched in between a tight area of support and resistance. It failed at the 50-day EMA and yesterday found support at the 20-day EMA. It could be a lower high being made, but the 200-day EMA held firmly earlier in August suggesting a low may be in. The direction of the dollar may give us the eventual answer.
BND (Bonds / F-fund) was up yesterday as yields continue to slip lower as the inflation data remains quiet. That could change with a hot jobs report today, although nothing we saw out of the labor market recently suggests that. But we've been fooled before by some fickle jobs numbers.
Thanks so much for reading! Have a great weekend!
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.
Like what you're seeing on TSP Talk? Why not Tell a Friend about us? We'd really appreciate it, and they may too.
Thanks!
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="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The PCE Prices and Personal Spending reports came in fairly close to estimates and if anything sent the futures down off their overnight highs after their release before the opening bell yesterday. It didn't seem to have that much of an impact although the dollar was up sharply for some reason.
This morning we get the August Jobs Report and that may be more impactful, especially if it doesn't come close to the estimates which are looking for a gain of 165,000 jobs and an unemployment rate of 3.6%.
I talked enough about the pre-holiday reversals but one thing I will repeat is that it is possible that yesterday and today, if down, could be the reversal from this new uptrend that started on August 18. Otherwise, maybe the relief is over - I don't know. There are a lot of indications that this new uptrend is for real, but September is a tough month for stocks and I doubt anyone is too comfortable going forward.
Yesterday the S&P 500 was down 0.16%, while the Equal Weighted S&P 500 (same 500 stocks but large cap stocks are weighted the same as the smaller companies) was down 0.35%. Not a huge difference but it also created another negative outside reversal day by a few ticks on each end.
The bounce back in the dollar contributed to the weakness in stocks yesterday, but the larger trend on UUP is still considered broken, although the new resistance line, which is the old broken support line, is rising.
The Yield on the 10-year Treasury was down slightly and may try to come down further to test the 50-day EMA as it had done a few times in previous months, but the dip in early August never got that far. The jobs report today could determine whether or not it gets tested this time around.
The Dow Transportation Index, which we mentioned yesterday had broken above its 50-day moving on Wednesday, closed back below it on Thursday as UPS and Union Pacific were the drag on the Index. It's still in the neighborhood but this market leader may be in a bear flag right now as it has not rallied off the lows as much as the broader market indices. If this breaks down it wouldn't be a good omen for the rest of the market.
September is normally a tough month for stocks, on average, and history shows that there's more trouble in the latter half of the month than the first half. A lot of the negative averages are due to some severe losses during down years over the last 30 years like in 2000, 2008, and last year. There have been some good years as well, but they aren't as common.
Chart provided courtesy of [url]www.sentimentrader.com
[/URL]
The S&P 500 (C-fund) made its highs of the day shortly after the opening bell yesterday, and closed at the lows of the day. Not the best action but after four very strong up days, it's not generally something to worry about. Pre / post holiday reversals may or may not be at play here and whether this gets pushed up toward the open gap above 4550 or pulls back toward the moving averages or the old resistance line (blue) may depend on the strength or weakness -- or the reaction to, the jobs report this morning. There is a concern that a gap fill could produce a peak for the relief rally, but it's hard to say with the light volume holiday trading we may be seeing today and into next week. The PMO crossover often pushes the chart into short-term overbought territory making a pullback -- whether minor, modest, or severe -- more likely, but it is a more bullish sign for the intermediate-term.
DWCPF (S-fund) ended the day with a gain and that 1800 area looks to be the pivot point here. Is this a breakout or the top of the right shoulder on the head and shoulder pattern, which would be bearish? Or, is that small open gap up near 1860 on the bulls' radar?
The EFA (I-fund) was down yesterday with the dollar rallying quite a bit. You can see that it is now sandwiched in between a tight area of support and resistance. It failed at the 50-day EMA and yesterday found support at the 20-day EMA. It could be a lower high being made, but the 200-day EMA held firmly earlier in August suggesting a low may be in. The direction of the dollar may give us the eventual answer.
BND (Bonds / F-fund) was up yesterday as yields continue to slip lower as the inflation data remains quiet. That could change with a hot jobs report today, although nothing we saw out of the labor market recently suggests that. But we've been fooled before by some fickle jobs numbers.
Thanks so much for reading! Have a great weekend!
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.
Like what you're seeing on TSP Talk? Why not Tell a Friend about us? We'd really appreciate it, and they may too.
Thanks!
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.
