Stocks were mostly flat on Thursday, but they battled back from an afternoon sell off to push back into the close. The Dow did lose 7-points on the day, off the 200-point loss it had earlier, while the other indices managed to close in positive territory. The S and I funds, and the Nasdaq, led on the upside while bonds were down, and the dollar ended flat.
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There were some decent swings yesterday that would have helped day traders enter and exit positions, but other than that, the last couple of days have been fairly flat. That's actually not a bad thing when there are several technical reasons why stocks could be going lower, so they are holding up well. The bears are trying to show some teeth but the bulls just keep buying those dips.
At the risk of sounding like a broken record (if you're old enough to know what that means), fundamentally the market is strong as far as monetary policy, corporate earnings growth, the credit market, pending stimulus, momentum, yada, yada, yada, but if you've been doing this for as long as I have, everything almost always looks rosy at the top. And market bottoms are usually riddled with doom and gloom, so a bit of a contrarian word of caution.
As warren Buffett said, be “fearful when others are greedy, and greedy when others are fearful.”
Yesterday the internals were a little negative, but this could just be some digestion of recent gains. The indices didn't really reflect the negative breadth we saw.
When we come back from the three day holiday weekend, the market will enter the historically weaker half of the month. However, as we've talked about, February has done rather well in more recent years, although 2020 was a disaster for February because of COVID.
Chart provided courtesy of www.sentimentrader.com
An update on the cannabis stocks that were flying high recently. Tilray was down about 50%yesterday, smacking the momentum traders. It had closed near 64 Wednesday and I actually put in an order to buy it at $45 where there was an open gap. I wasn't sure if that would get filled anytime soon, but no sooner did that opening bell ring than I was buying Tilray at $45. It continued to sink and I sold at $39 for quick and painful loss. It ended the day at 31.75 for a 50% loss.
Like Gamestop and other "traders", what goes up... Bitcoin has been one of these victims of huge swings here and there, but it is now trading at all time highs again. Will it be next to pull the plug on traders?
Disney posted solid earnings last night and traded higher in after hours trading, so that could help the Dow outperform today.
Monday is a holiday and the markets and TSP will be closed. Any transactions input will be processed at the close of business on Tuesday.
The S&P 500 (C-fund) chart has been in this 3+ month long flag-like formation, and for the year it isn't flying quite like the small caps, but these types of channels do tend to break to the downside, and the longer it gets, the more severe any break might be. It's hard to imagine a disaster at this point given the bull case I gave above regarding the Fed, credit, etc., but this chart is clearly pushing the upside of any short-term trading outlook.
The DWCPF (small caps / S-fund) had a mid-day scare yesterday but bounced back again to hold onto some decent gains. Like the S&P 500 chart above, resistance is being tested and the path of least resistance in the short-term may be down. Filling those small open gaps below wouldn't be the worst thing this chart can do.
The EFA (I-fund) rallied yesterday and the recent failure in the dollar's rally helped push this fund to a new high.
The chart of the price of oil looks a lot like the chart of the stock indices with the long rising trading channel. Believe it or not, here it is the 12th of February and oil had its first down day of the month. I'd say it looks ready to pullback to test the lower end of the channel again, but as we saw in January and December, it can actually move basically sideways, and not down, and wait for the channel to catch up to it.
BND (bonds / F-fund) pulled back yesterday as that bear flag continues to form. Not the best looking chart for bonds.
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 holiday 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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There were some decent swings yesterday that would have helped day traders enter and exit positions, but other than that, the last couple of days have been fairly flat. That's actually not a bad thing when there are several technical reasons why stocks could be going lower, so they are holding up well. The bears are trying to show some teeth but the bulls just keep buying those dips.
At the risk of sounding like a broken record (if you're old enough to know what that means), fundamentally the market is strong as far as monetary policy, corporate earnings growth, the credit market, pending stimulus, momentum, yada, yada, yada, but if you've been doing this for as long as I have, everything almost always looks rosy at the top. And market bottoms are usually riddled with doom and gloom, so a bit of a contrarian word of caution.
As warren Buffett said, be “fearful when others are greedy, and greedy when others are fearful.”
Yesterday the internals were a little negative, but this could just be some digestion of recent gains. The indices didn't really reflect the negative breadth we saw.
When we come back from the three day holiday weekend, the market will enter the historically weaker half of the month. However, as we've talked about, February has done rather well in more recent years, although 2020 was a disaster for February because of COVID.
Chart provided courtesy of www.sentimentrader.com
An update on the cannabis stocks that were flying high recently. Tilray was down about 50%yesterday, smacking the momentum traders. It had closed near 64 Wednesday and I actually put in an order to buy it at $45 where there was an open gap. I wasn't sure if that would get filled anytime soon, but no sooner did that opening bell ring than I was buying Tilray at $45. It continued to sink and I sold at $39 for quick and painful loss. It ended the day at 31.75 for a 50% loss.
Like Gamestop and other "traders", what goes up... Bitcoin has been one of these victims of huge swings here and there, but it is now trading at all time highs again. Will it be next to pull the plug on traders?
Disney posted solid earnings last night and traded higher in after hours trading, so that could help the Dow outperform today.
Monday is a holiday and the markets and TSP will be closed. Any transactions input will be processed at the close of business on Tuesday.
The S&P 500 (C-fund) chart has been in this 3+ month long flag-like formation, and for the year it isn't flying quite like the small caps, but these types of channels do tend to break to the downside, and the longer it gets, the more severe any break might be. It's hard to imagine a disaster at this point given the bull case I gave above regarding the Fed, credit, etc., but this chart is clearly pushing the upside of any short-term trading outlook.
The DWCPF (small caps / S-fund) had a mid-day scare yesterday but bounced back again to hold onto some decent gains. Like the S&P 500 chart above, resistance is being tested and the path of least resistance in the short-term may be down. Filling those small open gaps below wouldn't be the worst thing this chart can do.
The EFA (I-fund) rallied yesterday and the recent failure in the dollar's rally helped push this fund to a new high.
The chart of the price of oil looks a lot like the chart of the stock indices with the long rising trading channel. Believe it or not, here it is the 12th of February and oil had its first down day of the month. I'd say it looks ready to pullback to test the lower end of the channel again, but as we saw in January and December, it can actually move basically sideways, and not down, and wait for the channel to catch up to it.
BND (bonds / F-fund) pulled back yesterday as that bear flag continues to form. Not the best looking chart for bonds.
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 holiday 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.
