Stocks opened sharply lower on a Turnaround Tuesday and sold off-in early trading. The bulls pushed back for most of the day but a late push lower had the indices closing near those opening levels, so the bulls weren't able to completely stop the bleeding some. The Dow lost 300-points while the Nasdaq was helped by some familiar big tech names to keep it from closing in negative territory, and it actually hit 10,000 for the first time ever during intraday trading, before dipping late.
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Apple and Amazon hit all time highs briefly lifting the Nasdaq Composite above 10,000 for the first time, but it was a change in character yesterday as the recently surging small caps lagged on the day, and the S-fund shed nearly 2%.
Yesterday was day one of a two-day FOMC meeting so day 2 is today, and we know the Fed tends to be very dovish toward the market, so it's interesting that we finally saw a down day leading up to today's policy statement. No one is expecting any action on interest rates, but maybe they'll throw the economy a few more trillion. Why not, right?
Internally it was one of the weakest days for stocks since April 1, but the bulls' ability to keep the indices from pulling back too much, when there seems to be a lot of profit taking potential out there, was impressive. Markets like this don't tend to fall apart overnight. Instead they'll lull you to sleep before they dive, but this is strong bull market action and the bulls may not give up that easily after just one down day.
The S&P 500 (C-fund) was down on Tuesday but it held up rather well considering how the day started. It did sneak just back below the top of that rising trading channel, so that's a tiny crack in this very strong market. There's an open gap down by 3130 that could be a potential target if that old resistance line continues to fail.
The DWCPF (S-fund) was down fairly sharply but it had an amazing run during the prior 6 or 7 days days and a breather is more than deserved. It has remained in that rising channel for a long time so we'll keep watching the top and bottom for resistance and support during the short-term wiggles.
The EFA (I-fund) pulled back with the rest of the market, but the dollar was weak as well helping out some here.
The Dow Transportation Index lost over 2% as the airlines stocks stopped ramping up for a day. It was clearly extended and now we'll have to see if the bears can even pull it back to the resistance lines it had recently broken through.
The price of gold has been trading sideways for a couple of months now, and that's a monster bull flag. Should it break out it would have a fairly high upside target price but what would make gold accelerate higher right now with stocks doing so well? I suppose the answer is the weak dollar and possible inflation with interest rates so low, and money flowing.
The BND (F-fund) was up nicely but slipped off the morning highs and couldn't quite close above that old high that we've been watching since April. Yields had been moving up recently but still remain below 1% on the 10-year, so it's hard to say they're rising. They haven't turned negative yet, so I suppose that's good.
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. 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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Apple and Amazon hit all time highs briefly lifting the Nasdaq Composite above 10,000 for the first time, but it was a change in character yesterday as the recently surging small caps lagged on the day, and the S-fund shed nearly 2%.
Yesterday was day one of a two-day FOMC meeting so day 2 is today, and we know the Fed tends to be very dovish toward the market, so it's interesting that we finally saw a down day leading up to today's policy statement. No one is expecting any action on interest rates, but maybe they'll throw the economy a few more trillion. Why not, right?
Internally it was one of the weakest days for stocks since April 1, but the bulls' ability to keep the indices from pulling back too much, when there seems to be a lot of profit taking potential out there, was impressive. Markets like this don't tend to fall apart overnight. Instead they'll lull you to sleep before they dive, but this is strong bull market action and the bulls may not give up that easily after just one down day.
The S&P 500 (C-fund) was down on Tuesday but it held up rather well considering how the day started. It did sneak just back below the top of that rising trading channel, so that's a tiny crack in this very strong market. There's an open gap down by 3130 that could be a potential target if that old resistance line continues to fail.
The DWCPF (S-fund) was down fairly sharply but it had an amazing run during the prior 6 or 7 days days and a breather is more than deserved. It has remained in that rising channel for a long time so we'll keep watching the top and bottom for resistance and support during the short-term wiggles.
The EFA (I-fund) pulled back with the rest of the market, but the dollar was weak as well helping out some here.
The Dow Transportation Index lost over 2% as the airlines stocks stopped ramping up for a day. It was clearly extended and now we'll have to see if the bears can even pull it back to the resistance lines it had recently broken through.
The price of gold has been trading sideways for a couple of months now, and that's a monster bull flag. Should it break out it would have a fairly high upside target price but what would make gold accelerate higher right now with stocks doing so well? I suppose the answer is the weak dollar and possible inflation with interest rates so low, and money flowing.
The BND (F-fund) was up nicely but slipped off the morning highs and couldn't quite close above that old high that we've been watching since April. Yields had been moving up recently but still remain below 1% on the 10-year, so it's hard to say they're rising. They haven't turned negative yet, so I suppose that's good.
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. 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.
