Stocks rallied yesterday despite Microsoft's earnings issues, and the strength was initially due to chip stocks soaring after AMD's earnings, which also sent Nvidia up 13%, and being the driver of the large caps recently, sent the S&P 500 and Nasdaq up sharply. The Fed did no harm although it did tick up volatility and perhaps got investors a little nervous about September's expected rate cut, despite no change in the odds of a rate cut. It did however send small caps lower in late trading.
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The Yields on the 10-year Treasury fell to a new low in this downtrend and the dollar also tanked yesterday helping stocks, and most commodities, rally on the day.
The dollar tanked when the Yen jumped after Japan raised interest rates overnight. This weakness in the dollar helped the I-fund surge yesterday. It also helped gold close at a new record high, silver was a over 2%, but unfortunately the weak dollar pushed oil up about $4 a barrel, back above $78. The break down potentially opens the door to lower prices although it could do some backing and filling in the short-term.
The rally in the S&P 500 held up much better than the small caps, perhaps thanks to Nvidia, but it did close off the highs and the candlestick formation looks very much like the one left after the prior FOMC meeting in June. Coincidentally, stocks gapped up that day as well, then closed of the highs. It did chop around near that day's lows but it never did fill in the gap as several days later the S&P took off again.
The rally yesterday conveniently filled that open gap from July 24, and stalling there is a little concerning as once a gap is filled, it could have completed its snap back rally task.
And one more angle shows a possible head and shoulders pattern on the S&P, which are generally bearish, but more so in a down trending market and not at market peaks. But we will probably know within a few days which way this one goes.
The small caps of the Russell 2000 (not exactly the S-fund) broke out to a new high for 2024 yesterday, but it failed right about the time the Fed was wrapping up his press conference. A failed breakout isn't terrible, but the way this one played out was a little concerning.
The Dow Transportation index had a similar experience yesterday as it tagged the recent highs and backed off as well. This looks like a double top pullback, but it's more than that.
The longer term chart shows a fourth failure at this level. Normally if it knocks enough, the door will open, but it hasn't yet in this case.
META reported earnings after the bell yesterday and was trading up over 6% after hours, so that should help the S&P and Nasdaq today. Apple and Amazon will report after the bell today, and then on Friday we'll get the July jobs report where estimates are looking for a gain of about 170,000 jobs and an unemployment rate of 4.1%.
The August seasonality calendar has some issues, especially early on, but as we have talked about before, the month has done much better during election years.
Chart provided courtesy of www.sentimentrader.com
The July AutoTracker winners have been posted and what a month it was. Here are the winners and here are the monthly and annual (non-premium members) standings through July. Track your return on the AutoTracker - it's free!
The S&P 500 (C-fund): Commented above.
DWCPF (S-fund) gave up a 2.5% gain yesterday to end the day up "just" 0.72%. Who's complaining about a 0.72% gain? Well, the negative reversal and bull flag breakout failure, and the failure at the prior peak, is a little concerning although not a deal breaker.
The EFA (I-fund) had a really nice day and much of that came from the 0.54% decline in the dollar. I mentioned above that it was Japan's rate hike, yes hike, that triggered that move in the dollar, and that move did break the chart so maybe there's more downside to go in UUP, after some possible backing and filling first.
BND (bonds / F-fund) broke out to new highs and it is now testing the top of the ascending resistance line. Bonds look good and I'd be more interested if stocks didn't look better.
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.html
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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The Yields on the 10-year Treasury fell to a new low in this downtrend and the dollar also tanked yesterday helping stocks, and most commodities, rally on the day.
The dollar tanked when the Yen jumped after Japan raised interest rates overnight. This weakness in the dollar helped the I-fund surge yesterday. It also helped gold close at a new record high, silver was a over 2%, but unfortunately the weak dollar pushed oil up about $4 a barrel, back above $78. The break down potentially opens the door to lower prices although it could do some backing and filling in the short-term.
The rally in the S&P 500 held up much better than the small caps, perhaps thanks to Nvidia, but it did close off the highs and the candlestick formation looks very much like the one left after the prior FOMC meeting in June. Coincidentally, stocks gapped up that day as well, then closed of the highs. It did chop around near that day's lows but it never did fill in the gap as several days later the S&P took off again.
The rally yesterday conveniently filled that open gap from July 24, and stalling there is a little concerning as once a gap is filled, it could have completed its snap back rally task.
And one more angle shows a possible head and shoulders pattern on the S&P, which are generally bearish, but more so in a down trending market and not at market peaks. But we will probably know within a few days which way this one goes.
The small caps of the Russell 2000 (not exactly the S-fund) broke out to a new high for 2024 yesterday, but it failed right about the time the Fed was wrapping up his press conference. A failed breakout isn't terrible, but the way this one played out was a little concerning.
The Dow Transportation index had a similar experience yesterday as it tagged the recent highs and backed off as well. This looks like a double top pullback, but it's more than that.
The longer term chart shows a fourth failure at this level. Normally if it knocks enough, the door will open, but it hasn't yet in this case.
META reported earnings after the bell yesterday and was trading up over 6% after hours, so that should help the S&P and Nasdaq today. Apple and Amazon will report after the bell today, and then on Friday we'll get the July jobs report where estimates are looking for a gain of about 170,000 jobs and an unemployment rate of 4.1%.
The August seasonality calendar has some issues, especially early on, but as we have talked about before, the month has done much better during election years.
Chart provided courtesy of www.sentimentrader.com
The July AutoTracker winners have been posted and what a month it was. Here are the winners and here are the monthly and annual (non-premium members) standings through July. Track your return on the AutoTracker - it's free!
The S&P 500 (C-fund): Commented above.
DWCPF (S-fund) gave up a 2.5% gain yesterday to end the day up "just" 0.72%. Who's complaining about a 0.72% gain? Well, the negative reversal and bull flag breakout failure, and the failure at the prior peak, is a little concerning although not a deal breaker.
The EFA (I-fund) had a really nice day and much of that came from the 0.54% decline in the dollar. I mentioned above that it was Japan's rate hike, yes hike, that triggered that move in the dollar, and that move did break the chart so maybe there's more downside to go in UUP, after some possible backing and filling first.
BND (bonds / F-fund) broke out to new highs and it is now testing the top of the ascending resistance line. Bonds look good and I'd be more interested if stocks didn't look better.
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.html
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.
