The stock market bounced back on Monday from last week's sell-off and ironically it may have been the selling in the Gamestop that helped investors feel more "normal." Gamestop was down 100 points or 31% yesterday, and either this wave of short squeezes is over, or they are just waiting for the next opportunity. The Dow gained 229-points but the Nasdaq and small caps led with each gaining over 2% on the day.
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It was reported that the short squeezers were supposed to go after the silver shorts next, but many posts in the Reddit forums argued that it just wasn't the case, and that it was the media hyping up a non-event. Whatever it was, silver was up 10% yesterday.
The S&P 500 futures were down about 35-points when they opened up on Sunday evening, and that reversed quickly and of course when the market opened up, the the S&P 500 had a gain of about 70-points at the highs, so it was quite a positive reversal on the day. Those 60-points it gained yesterday didn't get back Friday's losses, but many charts improved quite a bit on the positive action. We only have to go back to last winter to remember that some of the biggest rallies come during bear markets, although we're certainly not at that level at this point, but it is a reminder that the market can throw us some smoke-screens to get us leaning the wrong way, so do be careful in the coming days.
Amazon and Google (Alphabet) will report earnings after the bell today, making Wednesday a possible big day for stocks - one way or the other. On Monday the Nasdaq got back all of Friday's losses, and then some, making it look like another "V" low for this trend higher, so keeping that alive may depend on those major earnings reports after the bell tonight.
While I liked the look of yesterday's action, the short squeeze chaos is still in the air and could possibly be putting investors in an uneasy mood, so I'd really like to see some follow through to the upside in the next day or two for me to be comfortable about the recent 5% pullback being behind us.
Admin note: Just an FYI, the monthly prize money has been increased for the AutoTracker winners for this year. First place will now have the option of taking a $50 Amazon eGift Card, and 2nd thru 5th can choose a $25 card. That is up from $30 and $15 in prior years. Good luck, and congratulations to SRS19 who won the January contest with a return of 8.66% for the month, and won a $50 Amazon card.
The S&P 500 (C-fund) has done a couple of very good things technically. The 5% pullback found support at the 50-day EMA and reversed, followed by a move back above the rising support line and back into the trading channel. If it's a fake-out we should know soon enough. Otherwise it may be business as usual for the bull market. The chart is still below the 20-day EMA so that's today's test.
The DWCPF (small caps / S-fund) gained over 2% on the day, and while the reversal and the move back above the 20-day EMA looks good, it is still below some key support. It could be that the angle of incline just needed some adjusting. The blue support line might be more manageable.
The Dow Jones Transportation Index is one of the market leaders, and its 1.34% gain wasn't quite as impressive given how sharply it had fallen and the technical damage that has been done to the chart in recent days.
The EFA (I-fund) was up but lagged a bit, likely because the dollar was up sharply.
The UUP chart shows a possible break above the 50-day EMA for the dollar. If that is in fact an "F" flag and not a bull flag in red in the chart above, it would be more likely to come back down in the coming days, than continue higher.
The Volatility Index fell over 8% and the bulls are happy to see it falling, but being near 30 is still a sign that the swings could be quite wide in the near future.
BND (bonds / F-fund) was down as it looks to possibly fill the open gap below. Seeing the bond market falling may be the best sign for the stock market right now as it indicates that there is no run for the safety trades yet.
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
Thanks 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.
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It was reported that the short squeezers were supposed to go after the silver shorts next, but many posts in the Reddit forums argued that it just wasn't the case, and that it was the media hyping up a non-event. Whatever it was, silver was up 10% yesterday.
The S&P 500 futures were down about 35-points when they opened up on Sunday evening, and that reversed quickly and of course when the market opened up, the the S&P 500 had a gain of about 70-points at the highs, so it was quite a positive reversal on the day. Those 60-points it gained yesterday didn't get back Friday's losses, but many charts improved quite a bit on the positive action. We only have to go back to last winter to remember that some of the biggest rallies come during bear markets, although we're certainly not at that level at this point, but it is a reminder that the market can throw us some smoke-screens to get us leaning the wrong way, so do be careful in the coming days.
Amazon and Google (Alphabet) will report earnings after the bell today, making Wednesday a possible big day for stocks - one way or the other. On Monday the Nasdaq got back all of Friday's losses, and then some, making it look like another "V" low for this trend higher, so keeping that alive may depend on those major earnings reports after the bell tonight.
While I liked the look of yesterday's action, the short squeeze chaos is still in the air and could possibly be putting investors in an uneasy mood, so I'd really like to see some follow through to the upside in the next day or two for me to be comfortable about the recent 5% pullback being behind us.
Admin note: Just an FYI, the monthly prize money has been increased for the AutoTracker winners for this year. First place will now have the option of taking a $50 Amazon eGift Card, and 2nd thru 5th can choose a $25 card. That is up from $30 and $15 in prior years. Good luck, and congratulations to SRS19 who won the January contest with a return of 8.66% for the month, and won a $50 Amazon card.
The S&P 500 (C-fund) has done a couple of very good things technically. The 5% pullback found support at the 50-day EMA and reversed, followed by a move back above the rising support line and back into the trading channel. If it's a fake-out we should know soon enough. Otherwise it may be business as usual for the bull market. The chart is still below the 20-day EMA so that's today's test.
The DWCPF (small caps / S-fund) gained over 2% on the day, and while the reversal and the move back above the 20-day EMA looks good, it is still below some key support. It could be that the angle of incline just needed some adjusting. The blue support line might be more manageable.
The Dow Jones Transportation Index is one of the market leaders, and its 1.34% gain wasn't quite as impressive given how sharply it had fallen and the technical damage that has been done to the chart in recent days.
The EFA (I-fund) was up but lagged a bit, likely because the dollar was up sharply.
The UUP chart shows a possible break above the 50-day EMA for the dollar. If that is in fact an "F" flag and not a bull flag in red in the chart above, it would be more likely to come back down in the coming days, than continue higher.
The Volatility Index fell over 8% and the bulls are happy to see it falling, but being near 30 is still a sign that the swings could be quite wide in the near future.
BND (bonds / F-fund) was down as it looks to possibly fill the open gap below. Seeing the bond market falling may be the best sign for the stock market right now as it indicates that there is no run for the safety trades yet.
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
Thanks 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.
