It was a very volatile day of trading on Thursday as the bulls and the bears had a pretty good battle going on. The bulls won the day picking up a decent gain in the large cap indices, but the the bears kept the small caps down, and there were actually more stocks down overall, than up on the day. The Dow added 87-points, erasing a 300+ point morning loess. Oil was down, bonds and the dollar were up.
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The Dow Transportation Index closed positive after its 5-day disaster. It had a nice positive reversal move after flirting with the previous lows. It does remain below the 200 (blue) and 300 (orange) day averages after free falling from well above the 50-day EMA. This is a perfect set up for a bounce, but a dead cat one at that. Things don't usually go unscathed after a drop like that.
It's Friday and it has been quite a week. April started out on a good note but has gotten a little shaky as the Fed's more hawkish outlook changed a lot of investors' sentiment. I'm not overly optimistic for 2022 but I still like to buy and sell the choppy action, and we are certainly getting a lot of that this year.
The S&P 500 (C-fund) has spent the last two days between two key moving averages as the bulls and bears battle for who is going to take control of the next bigger move. After the false breakout last week, the S&P is back in between that large trading channel. It is closer to the top of the channel so the downside risk may be higher, but a second breakout above that resistance could also strengthen that 4600 as support. I am leaning on the bullish side right now for a few reasons but mostly because it is above the 50-day average. That could easily be taken out with a sell off today, and with no real trend right now, things could continue to just chop around and frustrate both sides.
DWCPF (S-fund / small caps) did not come back into positive territory but they did close well off their lows and the chart can be considered a positive reversal. Filling the overhead gap could be the plan for the reversal, but the 50-day EMA is just above that so it's hard to call that reversal a low. It's in a trading range right now, and very close to the middle of that range so it could be a coin flip which way it goes next with open gaps on both sides.
The EFA (I-fund) was up slightly and that was a bit of a surprise given that stocks in the U.S. were down early in the day when the overseas markets were trading. Plus the dollar was up so the gain here is possibly fleeting.
BND (Bonds / F-fund) are.... not doing well. Be careful here while the trend remains down.
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. Have a great weekend!
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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The swings weren't huge but they were wide enough and confusing enough to get investors zigging when they should have been zagging, and vice versa. The early action had many thinking the indices were about to break down to test the 2022 lows, and by late afternoon we were looking at a near 1% gain in the S&P 500. Then some very late selling pushed the stocks meaningfully off the highs, and that was significant because yesterday's highs were right below some potential resistance.
Overall it was a good showing from the bulls but being below resistance and the internals being on the weak side with many more stocks down than up on the day, it may have kept some of the bulls away at the close. We'll have to see how they follow up in today's action.
The yield on the 10-year Treasury was up slightly closing at 2.65%. The dollar also continued its climb gaining another 0.19%, which takes away from the I-fund.
The price of oil was up early, hit its 50-day average and rolled over closing below the average for a 2nd straight day. Perhaps that is what helped stocks come back yesterday. It's been quite a ride for oil over the last month.
Overall it was a good showing from the bulls but being below resistance and the internals being on the weak side with many more stocks down than up on the day, it may have kept some of the bulls away at the close. We'll have to see how they follow up in today's action.
The yield on the 10-year Treasury was up slightly closing at 2.65%. The dollar also continued its climb gaining another 0.19%, which takes away from the I-fund.
The price of oil was up early, hit its 50-day average and rolled over closing below the average for a 2nd straight day. Perhaps that is what helped stocks come back yesterday. It's been quite a ride for oil over the last month.
The Dow Transportation Index closed positive after its 5-day disaster. It had a nice positive reversal move after flirting with the previous lows. It does remain below the 200 (blue) and 300 (orange) day averages after free falling from well above the 50-day EMA. This is a perfect set up for a bounce, but a dead cat one at that. Things don't usually go unscathed after a drop like that.
It's Friday and it has been quite a week. April started out on a good note but has gotten a little shaky as the Fed's more hawkish outlook changed a lot of investors' sentiment. I'm not overly optimistic for 2022 but I still like to buy and sell the choppy action, and we are certainly getting a lot of that this year.
The S&P 500 (C-fund) has spent the last two days between two key moving averages as the bulls and bears battle for who is going to take control of the next bigger move. After the false breakout last week, the S&P is back in between that large trading channel. It is closer to the top of the channel so the downside risk may be higher, but a second breakout above that resistance could also strengthen that 4600 as support. I am leaning on the bullish side right now for a few reasons but mostly because it is above the 50-day average. That could easily be taken out with a sell off today, and with no real trend right now, things could continue to just chop around and frustrate both sides.
DWCPF (S-fund / small caps) did not come back into positive territory but they did close well off their lows and the chart can be considered a positive reversal. Filling the overhead gap could be the plan for the reversal, but the 50-day EMA is just above that so it's hard to call that reversal a low. It's in a trading range right now, and very close to the middle of that range so it could be a coin flip which way it goes next with open gaps on both sides.
The EFA (I-fund) was up slightly and that was a bit of a surprise given that stocks in the U.S. were down early in the day when the overseas markets were trading. Plus the dollar was up so the gain here is possibly fleeting.
BND (Bonds / F-fund) are.... not doing well. Be careful here while the trend remains down.
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. Have a great weekend!
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.
