Other than a late morning scare, stock remained mostly buoyant into the afternoon on Monday, and a catapult final 20-30 minutes of trading pushed the indices to their highs of the day. The Dow closed with a gain of 175-points, while the Nasdaq and small caps each gained about 1% on the day. Bonds were up on a dip in yields, and the dollar rallied putting some pressure on the I-fund.
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The yield on the 10-year Treasury pulled back from Friday's big rally, and that gave the green light to the more growth oriented stocks to rally. At the same time we saw the reopen [economy] trade working as well as airlines stocks rallied sharply.
Internally things were looking as well as the indices made them appear. If there's any red mark it may be the 41 new lows on the Nasdaq.
Despite the strong rally on Monday, the Nasdaq 100 Index, which encompasses the FAANG and other large tech type stocks, is still lagging badly, and we can blame that on the rally in bond yields, which tend to stifle growth. The question is whether these stocks will eventually catch up, or if they will drag the rest of the market down with the Nasdaq. The NDX just got back above its 50-day EMA yesterday, so that's a good sign, but watch out if those yields move back up again.
March Madness is back. If you're interested in joining our free bracket contest, please go here for more information: [url]https://www.tsptalk.com/mb/site-news-and-announcements/36406-march-madness-contest-2021-a.html
[/URL]
The S&P 500 (C-fund) made a new closing high on Monday and below I am pointing out how the index responded after similar new highs. The blue lines basically show when those breakouts held. Some of these may have seen a pullback to test the breakout line, but for the most part they held. The red lines show breakouts that failed and came back to trade below the breakout lines. Since August there were three blue successful breakouts, and four red failed breakouts. What will this one be?
The DWCPF (small caps / S-fund) is still reaching for those prior highs, which looks like a slam dunk, but as I mentioned yesterday, the lower low earlier this March is potentially, but not certainly, the start of a descending trend, and that would only happen if this chart peaks before hitting that February high. It doesn't look like that will be the case, but it could still happen.
The EFA (I-fund) was up slightly but the dollar rallied too, and that held the I-find back a little. The price of the I-fund hasn't been posted yet, but based on the price on Friday, my guess is it will be at least a little better than +0.08% as the EFA shows, unless the 0.20% rally in the dollar was too much for it.
The Dow Transportation Index had another good day, helped out by a big rally in the airlines stocks. This chart does show how far this index has come since the October low, and since the end of January where it has gone almost straight up, except for the one day shakeout earlier this month.
BND (bonds / F-fund) was up as yields dipped back after Friday's rally. This is still a broken chart. I've said it looks like it could be due for some relief, but why bother with stocks rallying? Ironically, this is normally considered a safe haven when stocks are falling, but right now the stock market would prefer to see BND rally and see yields fall or at least stabilize.
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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[TD="width: 362, align: center"]
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The yield on the 10-year Treasury pulled back from Friday's big rally, and that gave the green light to the more growth oriented stocks to rally. At the same time we saw the reopen [economy] trade working as well as airlines stocks rallied sharply.
Internally things were looking as well as the indices made them appear. If there's any red mark it may be the 41 new lows on the Nasdaq.
Despite the strong rally on Monday, the Nasdaq 100 Index, which encompasses the FAANG and other large tech type stocks, is still lagging badly, and we can blame that on the rally in bond yields, which tend to stifle growth. The question is whether these stocks will eventually catch up, or if they will drag the rest of the market down with the Nasdaq. The NDX just got back above its 50-day EMA yesterday, so that's a good sign, but watch out if those yields move back up again.
March Madness is back. If you're interested in joining our free bracket contest, please go here for more information: [url]https://www.tsptalk.com/mb/site-news-and-announcements/36406-march-madness-contest-2021-a.html
[/URL]
The S&P 500 (C-fund) made a new closing high on Monday and below I am pointing out how the index responded after similar new highs. The blue lines basically show when those breakouts held. Some of these may have seen a pullback to test the breakout line, but for the most part they held. The red lines show breakouts that failed and came back to trade below the breakout lines. Since August there were three blue successful breakouts, and four red failed breakouts. What will this one be?
The DWCPF (small caps / S-fund) is still reaching for those prior highs, which looks like a slam dunk, but as I mentioned yesterday, the lower low earlier this March is potentially, but not certainly, the start of a descending trend, and that would only happen if this chart peaks before hitting that February high. It doesn't look like that will be the case, but it could still happen.
The EFA (I-fund) was up slightly but the dollar rallied too, and that held the I-find back a little. The price of the I-fund hasn't been posted yet, but based on the price on Friday, my guess is it will be at least a little better than +0.08% as the EFA shows, unless the 0.20% rally in the dollar was too much for it.
The Dow Transportation Index had another good day, helped out by a big rally in the airlines stocks. This chart does show how far this index has come since the October low, and since the end of January where it has gone almost straight up, except for the one day shakeout earlier this month.
BND (bonds / F-fund) was up as yields dipped back after Friday's rally. This is still a broken chart. I've said it looks like it could be due for some relief, but why bother with stocks rallying? Ironically, this is normally considered a safe haven when stocks are falling, but right now the stock market would prefer to see BND rally and see yields fall or at least stabilize.
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.
