The headline on CNBC's website after the market closed yesterday was that the Dow gained 100+ points to notch a 9-day winning streak, but clearly there were issues in the market, especially in the tech heavy Nasdaq, and that could be a game changer unless some of those bigger tech companies can impress investors with earnings and guidance in the coming week or two. Bonds were down as yields bounced off support, and the dollar rallied again.
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Home sales dropped to a 14 year low in June, but it's not so much an economic thing as a supply issue, which actually indicates some strength. Demand remains high but there isn't enough inventory for that demands so prices remain fairly firm.
Treasury Yields were up as that 50-day EMA held again, but this is starting to look like a head and shoulders pattern, and they often break to the downside eventually. That would only make sense if inflation is cooling, and the economy gets sluggish. Both seem like reasonable assumptions.
The dollar rallied again and the action seems typical after the precipitous decline it had in the first half of the month. There were open gaps that needed filling.
The EFA (I-fund) is very sensitive to the movement in the dollar, but it actually held up well considering US stocks were falling and the dollar rallied. That could be because overseas markets are less impacted by US tech stocks. However, there are gaps below that may need attention, and the island reversal pattern above the gap on this chart could be setting up for a breakdown, as that pattern tends to do. So, holding above 73 looks crucial for technical reasons.
Semiconductors were hit hard yesterday making the Nasdaq and Nasdaq 100 indices the main story on the day, on top of the sell off in Tesla (down 10%) and Netflix (down 8%) after their earnings releases. The ascending trend has barely been bruised at this point, but there are some targets below that could bring us a more meaningful decline to fill gaps and test rising support lines.
Next week is a big week for earnings and of course the Fed's decision of interest rates will be out on Wednesday afternoon. Buckle up because the bears may finally get interested again, but whether they are any match for the hungry dip buyers could be the main battle over the next few trading days.
The S&P 500 (C-fund) finally had a meaningful dip, but this doesn't tell us a whole lot as we knew stocks couldn't go up everyday, although as I mentioned above, the Dow has now been up for 9 straight days. There is a lot of support below although some of it is quite a bit below the current level because of the sharp angle of incline of this latest rally. Another 80 points down would be a hiccup and it would test the 20-day EMA., an area that has been holding since about early May. There's also support just above 4500 which, if it holds, will frustrate the bears immensely.
DWCPF (S-fund) took a 1% loss yesterday, which was stiff, but didn't even quite give up the gains of the prior two days. The support lines are drawn and investors are watching to see if they should be buying this dip at those support levels, or if this is finally something a little more meaningful.
BND (F-fund) sold off yesterday but was able to close above its 50-day EMA again after spending some time below it in yesterday's trading. The trick for this chart will be trying to avoid filling that open gap near 72. The action could be volatile leading up to next Wednesday's FOMC meeting.
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
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much 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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Home sales dropped to a 14 year low in June, but it's not so much an economic thing as a supply issue, which actually indicates some strength. Demand remains high but there isn't enough inventory for that demands so prices remain fairly firm.
Treasury Yields were up as that 50-day EMA held again, but this is starting to look like a head and shoulders pattern, and they often break to the downside eventually. That would only make sense if inflation is cooling, and the economy gets sluggish. Both seem like reasonable assumptions.
The dollar rallied again and the action seems typical after the precipitous decline it had in the first half of the month. There were open gaps that needed filling.
The EFA (I-fund) is very sensitive to the movement in the dollar, but it actually held up well considering US stocks were falling and the dollar rallied. That could be because overseas markets are less impacted by US tech stocks. However, there are gaps below that may need attention, and the island reversal pattern above the gap on this chart could be setting up for a breakdown, as that pattern tends to do. So, holding above 73 looks crucial for technical reasons.
Semiconductors were hit hard yesterday making the Nasdaq and Nasdaq 100 indices the main story on the day, on top of the sell off in Tesla (down 10%) and Netflix (down 8%) after their earnings releases. The ascending trend has barely been bruised at this point, but there are some targets below that could bring us a more meaningful decline to fill gaps and test rising support lines.
Next week is a big week for earnings and of course the Fed's decision of interest rates will be out on Wednesday afternoon. Buckle up because the bears may finally get interested again, but whether they are any match for the hungry dip buyers could be the main battle over the next few trading days.
The S&P 500 (C-fund) finally had a meaningful dip, but this doesn't tell us a whole lot as we knew stocks couldn't go up everyday, although as I mentioned above, the Dow has now been up for 9 straight days. There is a lot of support below although some of it is quite a bit below the current level because of the sharp angle of incline of this latest rally. Another 80 points down would be a hiccup and it would test the 20-day EMA., an area that has been holding since about early May. There's also support just above 4500 which, if it holds, will frustrate the bears immensely.
DWCPF (S-fund) took a 1% loss yesterday, which was stiff, but didn't even quite give up the gains of the prior two days. The support lines are drawn and investors are watching to see if they should be buying this dip at those support levels, or if this is finally something a little more meaningful.
BND (F-fund) sold off yesterday but was able to close above its 50-day EMA again after spending some time below it in yesterday's trading. The trick for this chart will be trying to avoid filling that open gap near 72. The action could be volatile leading up to next Wednesday's FOMC meeting.
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
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much 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.
