Stocks were very volatile to start the new week and the last trading day of the month. We saw wide swings and the indices closed mixed with the Dow and S&P 500 losing some ground - but well off the lows, while small caps and the Nasdaq rallied. Bonds broke out of one descending trading channel but there is a little more resistance before calling it a break of the trend.
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The S&P 500 (C-fund) has been volatile but has has closed within a range similar to what we saw at the January lows. Like January, we might see it break to the upside but there is more resistance overhead. There's also the possibility that it comes back down within that trading range to test the 4200 area. There's a lot of uncertainty out there and it may not get resolved until after the Fed meeting which is still a couple of weeks away.
The DWCPF (small caps / S-fund) rallied and added to last week's two day rally. Resistance is still present and maybe the bullishness of the first trading day of March will push it above that blue resistance line, but the 50-day EMA is just above that at 2025.
The EFA (I-fund) lagged and filled in the open gap we mentioned yesterday. It's now back below the support line of that large trading channel. This chart is in a downtrend and selling the rallies continues to look like the play here.
BND (Bonds / F-fund) had a huge day as bonds go, and it broke above that blue trading channel. There is one more line in the sand here with that red descending resistance line, and if it can get above that, I would think the 50-day EMA would be next - but it has to get above that red line first. There is now an open gap below near 81.30.
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 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 the final trading day in February and while we don't get "window dressing" like we do at the end of a quarter, there can be redistribution before heading into the new month, and with the mixed indices, that may have been what was happening. There is also a tendency for new money to come into the market on the first day or two of a new month. Not always, because there is also the tendency for a "new month, new direction" effect. The question is, after last week's strong rally and yesterday's mixed results, is this a market that has been heading up, or down to end the month?
Chart provided courtesy of www.sentimentrader.com
The 10-year yield fell sharply as economic growth concerns start to circulate. This is clear breakdown in the chart and the BND bond / F-fund chart (down in the TSP fund chart section below) is showing some signs of breaking above its long term downtrend.
The dollar was up but still eying that open gap from the Russian invasion reaction. This is actually decent looking chart despite the fact that inflation would normally be hurting the dollar. The threat of a series of interest rate hikes is helping.
As we head into the new month we can only wait and see what this market wants to do. Many short-term indicators had gotten quite extreme on the oversold side, but the action over the last three trading days has eased some of those extremes. I'm still a little concerned for stocks in 2022, but rallies in bear markets can be explosive and so maybe there is more upside to come. However, it has been so volatile out there and what happens in the morning has not been very indicative of how a day will end so it has been difficult to try to time entries and exits in our TSP funds with that noon ET deadline.
In general, when we see 1% moves on a regular basis, it is a market that is unstable and defense is usually the wise move, but if you can catch the upside of some of those days and lock in the gains, then you have something. Unfortunately with just two IFT's we do have our hands tied behind our backs a little, and the pros can run all over us.
Chart provided courtesy of www.sentimentrader.com
The 10-year yield fell sharply as economic growth concerns start to circulate. This is clear breakdown in the chart and the BND bond / F-fund chart (down in the TSP fund chart section below) is showing some signs of breaking above its long term downtrend.
The dollar was up but still eying that open gap from the Russian invasion reaction. This is actually decent looking chart despite the fact that inflation would normally be hurting the dollar. The threat of a series of interest rate hikes is helping.
As we head into the new month we can only wait and see what this market wants to do. Many short-term indicators had gotten quite extreme on the oversold side, but the action over the last three trading days has eased some of those extremes. I'm still a little concerned for stocks in 2022, but rallies in bear markets can be explosive and so maybe there is more upside to come. However, it has been so volatile out there and what happens in the morning has not been very indicative of how a day will end so it has been difficult to try to time entries and exits in our TSP funds with that noon ET deadline.
In general, when we see 1% moves on a regular basis, it is a market that is unstable and defense is usually the wise move, but if you can catch the upside of some of those days and lock in the gains, then you have something. Unfortunately with just two IFT's we do have our hands tied behind our backs a little, and the pros can run all over us.
The S&P 500 (C-fund) has been volatile but has has closed within a range similar to what we saw at the January lows. Like January, we might see it break to the upside but there is more resistance overhead. There's also the possibility that it comes back down within that trading range to test the 4200 area. There's a lot of uncertainty out there and it may not get resolved until after the Fed meeting which is still a couple of weeks away.
The DWCPF (small caps / S-fund) rallied and added to last week's two day rally. Resistance is still present and maybe the bullishness of the first trading day of March will push it above that blue resistance line, but the 50-day EMA is just above that at 2025.
The EFA (I-fund) lagged and filled in the open gap we mentioned yesterday. It's now back below the support line of that large trading channel. This chart is in a downtrend and selling the rallies continues to look like the play here.
BND (Bonds / F-fund) had a huge day as bonds go, and it broke above that blue trading channel. There is one more line in the sand here with that red descending resistance line, and if it can get above that, I would think the 50-day EMA would be next - but it has to get above that red line first. There is now an open gap below near 81.30.
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 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.
