The Netflix earnings put a lot of pressure on the Nasdaq, which was down over 1% on the day, and tech stocks yesterday but internally the numbers were better than the indices indicate. We saw decent gains in the Dow while some late selling turned the S&P 500 from green to the red in the final minutes of trading, but it was basically flat on the day. The I-fund led as we finally saw the dollar have a weak day. Bonds were up as yields pulled back.
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The yield on the 10-year Treasury was down a bit, and the dollar broke below some short-term rising support, which may have helped keep stocks buoyant despite the negative pressure from the sell off in tech.
As for the S&P 500, it was also held down by those large tech stocks and we can see that in the Equal Weighted S&P 500 index which actually saw a healthy gain yesterday, confirming the positive breadth on the NYSE. The RSP equal weighted S&P ETF looks little better than the S&P 500 (SPY) right now, but it did run into some resistance at yesterday's high.
The Dow Transportation Index had another big day even though it too closed well off the highs. But it not only flew past the 200-day EMA, but it also managed to close above the 50-day EMA. That's quite a relief rally and I don't know how long the bears will let this continue after that recent dramatic decline.
We can expect the headline triggered volatility to continue as next week will be a heavy dose of earnings from market movers like Apple, Amazon, Alphabet, Microsoft, and Meta (aka Facebook) and that should rock the boat and lead us into the following week when the Fed is expected to announce another interest rate hike on May 4th. Buckle up!
The S&P 500 (C-fund) was flat yesterday, giving up some late gains to close down 0.06%, but it did manage to close just above its 50-day EMA for a 2nd straight day. There was a very tiny open gap at the lows on April 8th, and that was filled yesterday. There is plenty of resistance on this chart, but if that blue channel turns out to be the handle of a cup and handle formation and we see a break above that channel, the next stop could be a test of the 4600 where a C&H formation would look to break above. That's a big if because a move above 4500 may not be easy.
DWCPF (S-fund / small caps) lagged a bit despite a healthy gain in the Russell 2000 small caps index yesterday. You can see resistance in the 1950 area, so if Tesla's earnings can help push it back above there, the bulls may have something to work with.
The EFA (I-fund) finally got a break as the dollar not only pulled back, but it broke its rising support line setting up a possible break in the trend, which would really benefit the I-fund. Yesterday it did benefit by breaking above its resistance line.
BND (Bonds / F-fund) had a rare good day but now it is testing the old support line, which could act as resistance. This has been beaten so much that a short-term rally is possible, but I wouldn't blink if I bought this.
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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Yesterday's after the bell headline was Tesla's earnings which investors seem to like it as it was up 5% in after hours trading and pushed the index futures higher. The problem for Tesla was that it was down 5% during regular trading hours.
But for the second day in a row, an earnings report reversed the market's closing direction right after the bell as the S&P 500 futures moved up about 12 points (it was down 3 at the close) right after Tesla's report, and the Nasdaq futures gained back about 60-points. So we head into Thursday with a little positive momentum.
The advancers beat declining stocks on the NYSE, and volume was also positive by a 3 to 2 ratio. The Nasdaq was actually even with as many up issues as down, but you can see the trouble with the share volume where the heavily traded tech stocks made the negative difference.
But for the second day in a row, an earnings report reversed the market's closing direction right after the bell as the S&P 500 futures moved up about 12 points (it was down 3 at the close) right after Tesla's report, and the Nasdaq futures gained back about 60-points. So we head into Thursday with a little positive momentum.
The advancers beat declining stocks on the NYSE, and volume was also positive by a 3 to 2 ratio. The Nasdaq was actually even with as many up issues as down, but you can see the trouble with the share volume where the heavily traded tech stocks made the negative difference.
The yield on the 10-year Treasury was down a bit, and the dollar broke below some short-term rising support, which may have helped keep stocks buoyant despite the negative pressure from the sell off in tech.
As for the S&P 500, it was also held down by those large tech stocks and we can see that in the Equal Weighted S&P 500 index which actually saw a healthy gain yesterday, confirming the positive breadth on the NYSE. The RSP equal weighted S&P ETF looks little better than the S&P 500 (SPY) right now, but it did run into some resistance at yesterday's high.
The Dow Transportation Index had another big day even though it too closed well off the highs. But it not only flew past the 200-day EMA, but it also managed to close above the 50-day EMA. That's quite a relief rally and I don't know how long the bears will let this continue after that recent dramatic decline.
We can expect the headline triggered volatility to continue as next week will be a heavy dose of earnings from market movers like Apple, Amazon, Alphabet, Microsoft, and Meta (aka Facebook) and that should rock the boat and lead us into the following week when the Fed is expected to announce another interest rate hike on May 4th. Buckle up!
The S&P 500 (C-fund) was flat yesterday, giving up some late gains to close down 0.06%, but it did manage to close just above its 50-day EMA for a 2nd straight day. There was a very tiny open gap at the lows on April 8th, and that was filled yesterday. There is plenty of resistance on this chart, but if that blue channel turns out to be the handle of a cup and handle formation and we see a break above that channel, the next stop could be a test of the 4600 where a C&H formation would look to break above. That's a big if because a move above 4500 may not be easy.
DWCPF (S-fund / small caps) lagged a bit despite a healthy gain in the Russell 2000 small caps index yesterday. You can see resistance in the 1950 area, so if Tesla's earnings can help push it back above there, the bulls may have something to work with.
The EFA (I-fund) finally got a break as the dollar not only pulled back, but it broke its rising support line setting up a possible break in the trend, which would really benefit the I-fund. Yesterday it did benefit by breaking above its resistance line.
BND (Bonds / F-fund) had a rare good day but now it is testing the old support line, which could act as resistance. This has been beaten so much that a short-term rally is possible, but I wouldn't blink if I bought this.
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.
