Stocks pulled back on Thursday as the churning just below recent highs continued. The Nasdaq was the biggest loser as there seems to be a move out of large tech and into value stocks, but even it rallied back strongly from its lowest levels yesterday. The Dow broke a 4-day winning streak with a loss of 135-points. Bonds continued to grind higher.
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It was a rough day for most of the indices, but the Nasdaq and Nasdaq 100 were getting hit particularly hard as the trend of moving from the high flying tech stocks into value stocks continued. The bounce during the day off of the morning lows was impressive, but after the bell we got an important earnings report from one of those high flyers and FAANG stocks, Netflix.
Why is a streaming movie service important? Netflix was one of the "stay at home" trades that has done very well this year despite losses in most indices. Their earnings beat on revenues and of course their subscriber numbers were great in the rear-view mirror report, but investors were looking for 3rd quarter guidance and that's where they fell short as most people had already made the move to their service at this point, so their growth potential was in question
The stock came down sharply in after hours trading, and being a Nasdaq stock, most of the rebound we saw in the Nasdaq in afternoon trading on Thursday, was given back after the bell in the futures market. Most of those losses came in the 15 minutes after the closing bell and that's why the futures may look positive to you overnight, but the $12 S&P fair value makes the implied open negative. See this page to see what I mean.
On the bright side, the losses in after hours trading had it settling near about 478 which is still above the 50-day EMA and the rising support line. Of course what happens when the opening bell rings will be more important and could set the tone for the day for the stock market, which should start out on the negative side barring any other major news
Next week we'll get a lot more of this as earnings season kicks into a higher gear.|
So far there hasn't been much technical damage done to the charts despite the inability to see new highs in some indices, and the recent losses in the high flying Nasdaq which has only pulled back toward the lower end of its rising trading channel.
This tech heavy index has been the leader off the March lows and the question many have is whether the other market indices will be the beneficiary of continued selling in the Nasdaq - if the selling continues, or if they will move down in sympathy.
The S&P 500 (C-fund) pulled back and the losses were muted by the afternoon rally. The futures were down after hours when Netflix reported their earnings, and I would call the 3145 - 3175 a key support area, but it could actually move all the way down to 3100 and still be OK technically, but that would be a hefty dip.
The DWCPF (S-fund) lagged a bit on Thursday after the big rally on Wednesday. There is still an open gap between Tuesday's high and Wednesday's low that could eventually get some attention. This looks like healthy consolidation right now, but there's a lot of room between support and resistance so we could continue to see wide swings without anything really happening.
The Dow Transportation Index was actually up nicely on the day and this chart has improved quite a bit. A pullback back down to the 200-day EMA to fill that open gap is possible, however.
The EFA (I-fund) pulled back to fill in the open gap from Wednesday, but other than that, it looks a lot like the US charts, which is a double top that may be getting ready for a breakout -- but it could still test the rising support line first.
The price of oil has been extremely quiet since those big moves in the spring. It seems to be pinned below the 200-day EMA, and above the 20-day EMA and something is going to have to give at some point. My guess is this will breakout to the upside IF stocks break out.
BND (bond ETF) was up again as yields slipped yet again, so those trends keep on keeping on.
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
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 a rough day for most of the indices, but the Nasdaq and Nasdaq 100 were getting hit particularly hard as the trend of moving from the high flying tech stocks into value stocks continued. The bounce during the day off of the morning lows was impressive, but after the bell we got an important earnings report from one of those high flyers and FAANG stocks, Netflix.
Why is a streaming movie service important? Netflix was one of the "stay at home" trades that has done very well this year despite losses in most indices. Their earnings beat on revenues and of course their subscriber numbers were great in the rear-view mirror report, but investors were looking for 3rd quarter guidance and that's where they fell short as most people had already made the move to their service at this point, so their growth potential was in question
The stock came down sharply in after hours trading, and being a Nasdaq stock, most of the rebound we saw in the Nasdaq in afternoon trading on Thursday, was given back after the bell in the futures market. Most of those losses came in the 15 minutes after the closing bell and that's why the futures may look positive to you overnight, but the $12 S&P fair value makes the implied open negative. See this page to see what I mean.
On the bright side, the losses in after hours trading had it settling near about 478 which is still above the 50-day EMA and the rising support line. Of course what happens when the opening bell rings will be more important and could set the tone for the day for the stock market, which should start out on the negative side barring any other major news
Next week we'll get a lot more of this as earnings season kicks into a higher gear.|
So far there hasn't been much technical damage done to the charts despite the inability to see new highs in some indices, and the recent losses in the high flying Nasdaq which has only pulled back toward the lower end of its rising trading channel.
This tech heavy index has been the leader off the March lows and the question many have is whether the other market indices will be the beneficiary of continued selling in the Nasdaq - if the selling continues, or if they will move down in sympathy.
The S&P 500 (C-fund) pulled back and the losses were muted by the afternoon rally. The futures were down after hours when Netflix reported their earnings, and I would call the 3145 - 3175 a key support area, but it could actually move all the way down to 3100 and still be OK technically, but that would be a hefty dip.
The DWCPF (S-fund) lagged a bit on Thursday after the big rally on Wednesday. There is still an open gap between Tuesday's high and Wednesday's low that could eventually get some attention. This looks like healthy consolidation right now, but there's a lot of room between support and resistance so we could continue to see wide swings without anything really happening.
The Dow Transportation Index was actually up nicely on the day and this chart has improved quite a bit. A pullback back down to the 200-day EMA to fill that open gap is possible, however.
The EFA (I-fund) pulled back to fill in the open gap from Wednesday, but other than that, it looks a lot like the US charts, which is a double top that may be getting ready for a breakout -- but it could still test the rising support line first.
The price of oil has been extremely quiet since those big moves in the spring. It seems to be pinned below the 200-day EMA, and above the 20-day EMA and something is going to have to give at some point. My guess is this will breakout to the upside IF stocks break out.
BND (bond ETF) was up again as yields slipped yet again, so those trends keep on keeping on.
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
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.
