Stocks took some modest losses yesterday, and while the bulls would have preferred to have seen more upside follow through, last week ended with quite a 2-day rally and some backing and filling isn't much of a surprise and not the worst thing that could happen. The question of course is whether that is all it is - backing and filling - or was last week yet another another fake out? The Dow lost about 200 points on the day and the broader indices gave up morning gains to close mostly lower. Bonds finished flat after some flip flopping during the day.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[/TD]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As goes Apple, I suppose. It was an early rally in Apple that helped pushed the indices higher, but that gain faded, and the rest of the market followed. It was the announcement of their new product, an Augmented Reality Headset, that initiated some excitement, but really? That didn't work out for Facebook (META), but what do I know? I think there are enough reality augmenting substances out there.
Just a quick update today with so little to derive from yesterday's action. Whether we are witnessing some profit taking or are witnessing another peak, it's tough to say based on yesterday. Trading volume was quite low, which is good to see on down days, and many of the major indices held onto breakout levels, although some did not.
The Dow Transportation Index barely cracked above the 200-day EMA on Friday and yesterday's selling smacked it right back below it. There is a small open gap just below Friday and Monday's low and that could be the target - or, another bear market rally for the Transports just peaked. It's tough to say without more information which will come as the week plays out.
The small caps of the Russell 200 also failed to hold its 200-day EMA after a 1.34% loss on Monday, which took away about half of Friday's gains.
The Nasdaq 100, which is leading the world with those big tech stocks, showed some vulnerability yesterday with a modest negative reversal day right at the top of it trading channel. It's too early to say anything bearish about this after hitting another 2023 high yesterday, but we could have a slight risk / reward issue with more room on the downside of the channel, than up.
And, if we take seasonality literally, which we really shouldn't most of the time, June 6th is the start of a less optimal few weeks for stocks over the last 30 years.
Chart provided courtesy of www.sentimentrader.com
The S&P 500 (C-fund) pulled back slightly after last week's late rally. No technical damage done although technically we do have a negative reversal day which could mean a little more downside action. Getting that open gap filled below 4250 would be fine with the bulls, although that puts it back below one of the breakout resistance lines. After being stubborn resistance for so long, I think 4200 is the key support area right now, although the 50-day EMA has been a rock of support for more than a month. I noted a possible negative divergence in the PMO indicator. We'll see if that becomes an issue if it starts to rollover again here below the April high.
The DWCPF (S-fund) pulled back sharply early yesterday but dip buyers did show up and the 200-day EMA did hold, unlike its sibling Russell 2000 chart (IWM) that I posted in the upper section. There's an open gap below the support line so that's a sticky situation. The bulls want to see support hold, but getting that gap filled wouldn't be a bad thing - as long as the bottom of the gap can hold.
The EFA (I-fund) was down but held at the 50-day EMA so no harm done yet. The recent strength in the dollar has stolen this fund's leadership but it looks like it is trying to form another "V" bottom. There are still some open gaps above and below and slowly some are getting filled.
BND (Bonds / F-fund) was flat after spending early Monday morning deep in negative territory, and a pop higher a little later. Open gaps and moving averages seem to pushing and pulling this chart at the moment.
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
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.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As goes Apple, I suppose. It was an early rally in Apple that helped pushed the indices higher, but that gain faded, and the rest of the market followed. It was the announcement of their new product, an Augmented Reality Headset, that initiated some excitement, but really? That didn't work out for Facebook (META), but what do I know? I think there are enough reality augmenting substances out there.
Just a quick update today with so little to derive from yesterday's action. Whether we are witnessing some profit taking or are witnessing another peak, it's tough to say based on yesterday. Trading volume was quite low, which is good to see on down days, and many of the major indices held onto breakout levels, although some did not.
The Dow Transportation Index barely cracked above the 200-day EMA on Friday and yesterday's selling smacked it right back below it. There is a small open gap just below Friday and Monday's low and that could be the target - or, another bear market rally for the Transports just peaked. It's tough to say without more information which will come as the week plays out.
The small caps of the Russell 200 also failed to hold its 200-day EMA after a 1.34% loss on Monday, which took away about half of Friday's gains.
The Nasdaq 100, which is leading the world with those big tech stocks, showed some vulnerability yesterday with a modest negative reversal day right at the top of it trading channel. It's too early to say anything bearish about this after hitting another 2023 high yesterday, but we could have a slight risk / reward issue with more room on the downside of the channel, than up.
And, if we take seasonality literally, which we really shouldn't most of the time, June 6th is the start of a less optimal few weeks for stocks over the last 30 years.
Chart provided courtesy of www.sentimentrader.com
The S&P 500 (C-fund) pulled back slightly after last week's late rally. No technical damage done although technically we do have a negative reversal day which could mean a little more downside action. Getting that open gap filled below 4250 would be fine with the bulls, although that puts it back below one of the breakout resistance lines. After being stubborn resistance for so long, I think 4200 is the key support area right now, although the 50-day EMA has been a rock of support for more than a month. I noted a possible negative divergence in the PMO indicator. We'll see if that becomes an issue if it starts to rollover again here below the April high.
The DWCPF (S-fund) pulled back sharply early yesterday but dip buyers did show up and the 200-day EMA did hold, unlike its sibling Russell 2000 chart (IWM) that I posted in the upper section. There's an open gap below the support line so that's a sticky situation. The bulls want to see support hold, but getting that gap filled wouldn't be a bad thing - as long as the bottom of the gap can hold.
The EFA (I-fund) was down but held at the 50-day EMA so no harm done yet. The recent strength in the dollar has stolen this fund's leadership but it looks like it is trying to form another "V" bottom. There are still some open gaps above and below and slowly some are getting filled.
BND (Bonds / F-fund) was flat after spending early Monday morning deep in negative territory, and a pop higher a little later. Open gaps and moving averages seem to pushing and pulling this chart at the moment.
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
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.
