The week that was supposed to be chaotic and volatile has been anything but, and that had many investors leaning the wrong way and trying to catch the boat that may have left the docks. The Dow gained another impressive 543-points and once again the Nasdaq was the leader. Unlike on Wednesday, small caps did well as those regional bank stocks that were hot hard the day before, bounced back with gain of over 4% on Thursday.
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Bond yields rallied back a bit, and the dollar was down sharply and that generally helps the prices of almost everything. Just look at bitcoin which rallied over $1100 yesterday with that dollar down about 1%, and gold which rallied $50 and broke to a 2 month high.
Also unlike Wednesday, internally the market was much stronger yesterday with up volume almost 6 times that of declining on the NYSE.
Is this all about the split in congress, or just the fact that the election is " almost" behind us?
COVID cases hit a one-day record on Wednesday with more than 100,000 cases being reported that day. And while the correction in late October was blamed on the spike in cases, clearly the market is unconcerned with that at the moment and seems to only use that as an excuse when there's nothing else to blame a stock market pullback on. What these case counts mean is another story. I still don't know anybody who has actually gotten sick from the virus, although I know a few who have tested positive but had no symptoms. So what does that mean for the economy? A positive test will keep people nervous and more likely at home, but we have seen signs that businesses are making adjustments and getting the economy growing again.
It looks like we have a pretty good setup, but the S&P 500 has rallied nearly 10% since last Friday's lows, and that just can't continue without some kind of digestion in the indices.
The October jobs report comes out this morning (Friday) and estimates are looking for a gain of about 675,000 jobs, and an unemployment rate of 7.7%.
The S&P 500 (C-fund) rallied another 2% on Thursday and the wild swings continue, although this week the swings were all up, after last week's were mostly all down.
Is this a triple top forming? Double tops are more dangerous than triple tops, but it can still pause a market, especially after a run like we've had over the last 4 days. This angle of incline is not sustainable, but it could turn out to be the pole of a bull flag with only a minimal pullback. There are several open gaps that may need to be addressed eventually.
The DWCPF (S-fund) had a big day and this one is creating in a double top formation, so there "could" be some selling pressure here, although there was no signs of that yesterday. Again, open gaps and an unsustainable angle of incline are the downside here.
The dollar fell out of bed yesterday losing almost 1% on the day so that is quite a 2-day decline for the greenback. There's some possible support at yesterday's low but this is an ugly chart and any relief rally may be short-lived.
The EFA (I-fund) benefits from a weak dollar and look at the run this fund has made this week. Huge open gaps, an unsustainable angle of incline, and a quadruple top? Quadruple tops aren't really a thing but it could still pause here before breaking out.
The VIX plunged again, and this time it fell right below the 200-day EMA. On the other hand, it closed near its highs of the day so perhaps investors are bracing for the bears to potentially step in for a spell and pull stocks back for a rest.
BND (F-fund) was up again although yields were also up so I'm not sure what the story is here. To me it looks like yields want to resume to the upside as it finds a double dose of support near 0.75% after the big decline on Wednesday.
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. Have a great weekend!
Tom Crowley
[/COLOR]
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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Bond yields rallied back a bit, and the dollar was down sharply and that generally helps the prices of almost everything. Just look at bitcoin which rallied over $1100 yesterday with that dollar down about 1%, and gold which rallied $50 and broke to a 2 month high.
Also unlike Wednesday, internally the market was much stronger yesterday with up volume almost 6 times that of declining on the NYSE.
Is this all about the split in congress, or just the fact that the election is " almost" behind us?
COVID cases hit a one-day record on Wednesday with more than 100,000 cases being reported that day. And while the correction in late October was blamed on the spike in cases, clearly the market is unconcerned with that at the moment and seems to only use that as an excuse when there's nothing else to blame a stock market pullback on. What these case counts mean is another story. I still don't know anybody who has actually gotten sick from the virus, although I know a few who have tested positive but had no symptoms. So what does that mean for the economy? A positive test will keep people nervous and more likely at home, but we have seen signs that businesses are making adjustments and getting the economy growing again.
It looks like we have a pretty good setup, but the S&P 500 has rallied nearly 10% since last Friday's lows, and that just can't continue without some kind of digestion in the indices.
The October jobs report comes out this morning (Friday) and estimates are looking for a gain of about 675,000 jobs, and an unemployment rate of 7.7%.
The S&P 500 (C-fund) rallied another 2% on Thursday and the wild swings continue, although this week the swings were all up, after last week's were mostly all down.
Is this a triple top forming? Double tops are more dangerous than triple tops, but it can still pause a market, especially after a run like we've had over the last 4 days. This angle of incline is not sustainable, but it could turn out to be the pole of a bull flag with only a minimal pullback. There are several open gaps that may need to be addressed eventually.
The DWCPF (S-fund) had a big day and this one is creating in a double top formation, so there "could" be some selling pressure here, although there was no signs of that yesterday. Again, open gaps and an unsustainable angle of incline are the downside here.
The dollar fell out of bed yesterday losing almost 1% on the day so that is quite a 2-day decline for the greenback. There's some possible support at yesterday's low but this is an ugly chart and any relief rally may be short-lived.
The EFA (I-fund) benefits from a weak dollar and look at the run this fund has made this week. Huge open gaps, an unsustainable angle of incline, and a quadruple top? Quadruple tops aren't really a thing but it could still pause here before breaking out.
The VIX plunged again, and this time it fell right below the 200-day EMA. On the other hand, it closed near its highs of the day so perhaps investors are bracing for the bears to potentially step in for a spell and pull stocks back for a rest.
BND (F-fund) was up again although yields were also up so I'm not sure what the story is here. To me it looks like yields want to resume to the upside as it finds a double dose of support near 0.75% after the big decline on Wednesday.
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. Have a great weekend!
Tom Crowley
[/COLOR]
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.
