Stocks fell and the tone for the day had been set after the bell on Monday after the Wal-Mart earnings warning. The Dow lost 229-points and near the lows of the day. The Nasdaq lagged heading into some big earnings reports after the bell yesterday. Small caps and the I-fund also fell sharply. Bonds were up early but flattened a bit by the close. The dollar was strong putting pressure on commodities as oil gave up an early gain to close down almost 2%.
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After the bell Alphabet (Google) missed estimates but was trading higher in after hours trading, basically getting back the losses from earlier in the day. That helped the index futures bounce a after hours as well. Microsoft also missed and was trading down just slightly after hours, so this may be telling us that the market was pricing in the disappointments.
The 10-year Treasury Yield slipped lower pushing bonds up slightly on the day. There's an overhead gap on the 10-year but this head and shoulder pattern looks toppy. I wouldn't be surprised if the gap gets filled at some point during the volatility following the Fed rate hike today but looking out further the trend and technical analysis seem to be pointing to lower yields ahead.
The dollar was up as it remains in the rising channel. This put pressure on prices in general, including stocks, oil, lumber, and gold.
Crude Oil lost an early gain which created a failed breakout after slipping into the red, and here it is back down testing the support of the 200-day EMA again, as the descending channel continues to hold.
I'll make this quick again because these earnings are nice short term market movers, but it is the Fed who will set the tone perhaps for the rest of the summer as they not only raise interest rates today, but perhaps hint to their plans for futures meetings this year. The question will be whether fighting inflation is their number one goal, or if they will back off some with the economy weakening.
The S&P 500 (C-fund) fell below its 50-day EMA after failing at the top of what looks like a big bear flag. The open gap near 3800 could get filled in a volatile day of trading that we have in front of us, but the surprise move would be to the upside since so many people are bearish. Earnings may help with an early rally, but the key will be where it closes after the Fed rate hike and commentary.
The DWCPF (S-fund) chart looks nearly identical technically to the S&P, so it will likely move in unison with the chart above again today.
EFA (I-fund) was stymied by weakness in the U.S. market and a rally in the dollar.
BND (F-fund) was up sharply earlier in the day, but settled close to flat on the day. There is an open gap below 76 but some support just above that level as well. This looks like the trend may have turned positive recently, but support needs to hold.
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
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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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After the bell Alphabet (Google) missed estimates but was trading higher in after hours trading, basically getting back the losses from earlier in the day. That helped the index futures bounce a after hours as well. Microsoft also missed and was trading down just slightly after hours, so this may be telling us that the market was pricing in the disappointments.
The 10-year Treasury Yield slipped lower pushing bonds up slightly on the day. There's an overhead gap on the 10-year but this head and shoulder pattern looks toppy. I wouldn't be surprised if the gap gets filled at some point during the volatility following the Fed rate hike today but looking out further the trend and technical analysis seem to be pointing to lower yields ahead.
The dollar was up as it remains in the rising channel. This put pressure on prices in general, including stocks, oil, lumber, and gold.
Crude Oil lost an early gain which created a failed breakout after slipping into the red, and here it is back down testing the support of the 200-day EMA again, as the descending channel continues to hold.
I'll make this quick again because these earnings are nice short term market movers, but it is the Fed who will set the tone perhaps for the rest of the summer as they not only raise interest rates today, but perhaps hint to their plans for futures meetings this year. The question will be whether fighting inflation is their number one goal, or if they will back off some with the economy weakening.
The S&P 500 (C-fund) fell below its 50-day EMA after failing at the top of what looks like a big bear flag. The open gap near 3800 could get filled in a volatile day of trading that we have in front of us, but the surprise move would be to the upside since so many people are bearish. Earnings may help with an early rally, but the key will be where it closes after the Fed rate hike and commentary.
The DWCPF (S-fund) chart looks nearly identical technically to the S&P, so it will likely move in unison with the chart above again today.
EFA (I-fund) was stymied by weakness in the U.S. market and a rally in the dollar.
BND (F-fund) was up sharply earlier in the day, but settled close to flat on the day. There is an open gap below 76 but some support just above that level as well. This looks like the trend may have turned positive recently, but support needs to hold.
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.
