Just another positive Monday for the stock market making it 9 consecutive Mondays with a gain for the S&P 500. That can't last forever but neither can the current string of 4 consecutive negative Tuesdays, all in August, heading into the last Tuesday of the month. The Dow gained 213-points yesterday as yields and the dollar slipped lower on the day, creating a slight breeze at the backs of the indices. As the recent bounce off the lows grows, important resistance tests will be next.
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The Yield on the 10-year Treasury fell slightly yesterday after hitting resistance and starting to pull back last week. The peak close for the yield was on August 21 and the S&P 500 made a low on the prior trading day. As stock prices continue to fade the direction of yields, the question is whether the peak in yields is just temporary or if this pullback can take this yield down to the bottom of its trading channel, which is currently sitting near 4.0%. There's also some support near 4.15%.
The one-year chart shows it also hitting a double top from back in October of 2022.
The S&P 500 (C-fund) pushed up above another layer of resistance including the 50-dy EMA (purple), although the 20-day EMA green) is currently at 4438, just 5 points above yesterday's close. The old gap that was filled earlier this month, is being tested again so it seems to be an important area that could make or break this relief rally. If this relief rally is going to fail it could be soon, otherwise the bulls could take charge again if we see a move above 4465, which would take it above the breakdown candle high from last Thursday.
The chart above is the same as the one above it except I highlighted the rare negative outside reversal days that we have had recently. The one in late July was followed by a two day rally that retraced a lot of that Thursday July 27 breakdown candle. The current 2-day rally is also retracing the breakdown candle from last Thursday. The prior one didn't work out too well for the bulls when August began.
The large cap tech stocks of the Nasdaq 100 also closed back above its 50-day EMA (purple) and just short of its 20-day EMA (green) as it also retraces the breakdown candle from last Thursday when Nvidia popped, peaked, and dropped.
The highlight this week will be the PCE Prices and Personal Spending reports, which come out on Thursday. Then the August Jobs Report comes out on Friday and estimates are looking for a gain of 165,000 jobs and an unemployment rate of 3.6%. That is a Friday before a major 3-day holiday weekend so the reaction could be interesting if trading volume is on the light side.
I went over the S&P 500 (C-fund) chart above with a more zoomed in view. This one shows the rising support line from off the prior lows is still holding, so you can see support and resistance will be battling the rest of the week - a pre-holiday week, which makes things that much more tough to analyze. Trading volume may dry up this week as Wall Street gets in their late summer vacations.
DWCPF (S-fund) was up nicely but it faded off its highs after testing some overhead resistance. The top of a bear flag was tested, and that is the same area where the rising support line off the previous lows (blue), seems to have turned into resistance. It's 1800+ or bust for this chart as resistance get more pervasive.
The EFA (I-fund) gapped up but peaked at the top of that blue bear flag, so the test begins today for the bulls. There is a confluence of resistance up near 71.75 but it would have to break above that bear flag to get there. It is a pre-holiday week and often you get action that is the opposite of what you might expect, with the resumption of "normal" action after the holiday. We'll see.
BND (Bonds / F-fund) managed to poke its head above a layer of resistance yesterday with yields moving down slightly on the day. There is an open gap down near 70.70 but this pre-holiday action could have it ignoring that gap until next week.
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
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Like what you're seeing on TSP Talk? Why not Tell a Friend about us? We'd really appreciate it, and they may too.
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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 Yield on the 10-year Treasury fell slightly yesterday after hitting resistance and starting to pull back last week. The peak close for the yield was on August 21 and the S&P 500 made a low on the prior trading day. As stock prices continue to fade the direction of yields, the question is whether the peak in yields is just temporary or if this pullback can take this yield down to the bottom of its trading channel, which is currently sitting near 4.0%. There's also some support near 4.15%.
The one-year chart shows it also hitting a double top from back in October of 2022.
The S&P 500 (C-fund) pushed up above another layer of resistance including the 50-dy EMA (purple), although the 20-day EMA green) is currently at 4438, just 5 points above yesterday's close. The old gap that was filled earlier this month, is being tested again so it seems to be an important area that could make or break this relief rally. If this relief rally is going to fail it could be soon, otherwise the bulls could take charge again if we see a move above 4465, which would take it above the breakdown candle high from last Thursday.
The chart above is the same as the one above it except I highlighted the rare negative outside reversal days that we have had recently. The one in late July was followed by a two day rally that retraced a lot of that Thursday July 27 breakdown candle. The current 2-day rally is also retracing the breakdown candle from last Thursday. The prior one didn't work out too well for the bulls when August began.
The large cap tech stocks of the Nasdaq 100 also closed back above its 50-day EMA (purple) and just short of its 20-day EMA (green) as it also retraces the breakdown candle from last Thursday when Nvidia popped, peaked, and dropped.
The highlight this week will be the PCE Prices and Personal Spending reports, which come out on Thursday. Then the August Jobs Report comes out on Friday and estimates are looking for a gain of 165,000 jobs and an unemployment rate of 3.6%. That is a Friday before a major 3-day holiday weekend so the reaction could be interesting if trading volume is on the light side.
I went over the S&P 500 (C-fund) chart above with a more zoomed in view. This one shows the rising support line from off the prior lows is still holding, so you can see support and resistance will be battling the rest of the week - a pre-holiday week, which makes things that much more tough to analyze. Trading volume may dry up this week as Wall Street gets in their late summer vacations.
DWCPF (S-fund) was up nicely but it faded off its highs after testing some overhead resistance. The top of a bear flag was tested, and that is the same area where the rising support line off the previous lows (blue), seems to have turned into resistance. It's 1800+ or bust for this chart as resistance get more pervasive.
The EFA (I-fund) gapped up but peaked at the top of that blue bear flag, so the test begins today for the bulls. There is a confluence of resistance up near 71.75 but it would have to break above that bear flag to get there. It is a pre-holiday week and often you get action that is the opposite of what you might expect, with the resumption of "normal" action after the holiday. We'll see.
BND (Bonds / F-fund) managed to poke its head above a layer of resistance yesterday with yields moving down slightly on the day. There is an open gap down near 70.70 but this pre-holiday action could have it ignoring that gap until next week.
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.
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.
