Stocks were up early on the Alphabet and Microsoft earnings, but moved into another gear higher after the Fed's new policy statement announcement on rates and the speech that followed. Getting a big move in stocks on an FOMC meeting day is not a surprise. This year having those rallies hold the day after is the tricky part. The Dow gained 436-points and it was actually lagging the broader indices which gained 2.6% to 4% depending on the index.
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The Fed didn't say that inflation is getting under control yet. They didn't say that the economy is looking better. They didn't say that they are seeing positive effects of their prior rate hikes. They just said they'll take it meeting by meeting on rate hikes and the market which is a bit of a pivot from the full steam ahead on rates approach.
Now whether that means good things or bad things to come, we don't know, but the market sensed a change and investors plowed into stocks.
The reaction was quite extreme so I don't want to get too analytical because it could just be an emotional reaction flips back today, so this is going to be the only stock fund chart I will show today. It basically shows what happened after the prior two FOMC meeting and you can see that there was a rally on the day of each of those prior two meetings, but both pulled back the following day.
After that however, the action was quite different as the May meeting led to a dramatic decline afterward and the June meeting saw the market stabilize after a one day push lower after the meeting.
The 10-year Treasury Yield fell again and is teetering on the neckline of that head and shoulders pattern - hinting at a major breakdown if that support can't hold, which would be bullish for bonds and the F-fund if that happened.
The dollar also pulled back yesterday, but only enough to fill an open gap near 28.50, and weakness in the dollar can bring with it higher prices as we saw yesterday in stocks, bonds, gold, silver, oil, bitcoin, etc. There is some support at yesterday's lows so we'll have to see if that holds today and the rest of the week, which stocks may need to see happen if the rally is going to get any follow-through on the upside.
Facebook (Meta) reported after the bell and it was a bit of a disappointment and the futures dipped a bit afterhours, but that may not mean a whole lot for today.
Speculating is the name of the game for us market timers but yesterday could have been a change in character, or a fake out to get us leaning the wrong way. We may need to see another day or two of action before we know the answer to that. It would be gambling to guess here, but you could certainly make educated guesses. I'm more in the better safe than sorry and show me camp right now, but that could change in the coming days. So, I need to see more today and Friday before speculating further.
BND (F-fund) was up modestly yesterday but closed off the highs of the day after flirting the previous highs from the last week. The trend is now up for the short-term, but there is an open gap down below 76 that could bring it back to the bottom of the new rising trading channel.
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. 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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[TD="width: 338, align: center"] Daily TSP Funds Return
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The Fed didn't say that inflation is getting under control yet. They didn't say that the economy is looking better. They didn't say that they are seeing positive effects of their prior rate hikes. They just said they'll take it meeting by meeting on rate hikes and the market which is a bit of a pivot from the full steam ahead on rates approach.
Now whether that means good things or bad things to come, we don't know, but the market sensed a change and investors plowed into stocks.
The reaction was quite extreme so I don't want to get too analytical because it could just be an emotional reaction flips back today, so this is going to be the only stock fund chart I will show today. It basically shows what happened after the prior two FOMC meeting and you can see that there was a rally on the day of each of those prior two meetings, but both pulled back the following day.
After that however, the action was quite different as the May meeting led to a dramatic decline afterward and the June meeting saw the market stabilize after a one day push lower after the meeting.
The 10-year Treasury Yield fell again and is teetering on the neckline of that head and shoulders pattern - hinting at a major breakdown if that support can't hold, which would be bullish for bonds and the F-fund if that happened.
The dollar also pulled back yesterday, but only enough to fill an open gap near 28.50, and weakness in the dollar can bring with it higher prices as we saw yesterday in stocks, bonds, gold, silver, oil, bitcoin, etc. There is some support at yesterday's lows so we'll have to see if that holds today and the rest of the week, which stocks may need to see happen if the rally is going to get any follow-through on the upside.
Facebook (Meta) reported after the bell and it was a bit of a disappointment and the futures dipped a bit afterhours, but that may not mean a whole lot for today.
Speculating is the name of the game for us market timers but yesterday could have been a change in character, or a fake out to get us leaning the wrong way. We may need to see another day or two of action before we know the answer to that. It would be gambling to guess here, but you could certainly make educated guesses. I'm more in the better safe than sorry and show me camp right now, but that could change in the coming days. So, I need to see more today and Friday before speculating further.
BND (F-fund) was up modestly yesterday but closed off the highs of the day after flirting the previous highs from the last week. The trend is now up for the short-term, but there is an open gap down below 76 that could bring it back to the bottom of the new rising trading channel.
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. 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.
