The overnight futures were getting hit hard on Monday night but we did see some early buying on Tuesday to push some indices into the green in that first hour of trading. The bears then stepped in and pushed the indices toward those overnight lows again, which happened to be getting very close to the January lows. A positive reversal day was looking very possible, but more selling during the final hour swatted that attempt back and we saw more heavy losses by the close. The Dow gave up 483-points with Home Depot, the 2nd heaviest weighted stock in the Dow, down nearly 9% being the drag.
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The S&P 500 (C-fund) made its lowest close of the year yesterday. It started to shape up as a Turnaround Tuesday, but some late selling smacked the indices back down after the midday rally off the lows. The chances of a test of the lows, and even a lower low are certainly there, but we could also see some buying before that happens because of some of the extremes we are seeing in the indicators.
The DWCPF (small caps / S-fund) lagged and surprisingly it has not as close to its January lows as the S&P 500 and Nasdaq. That could mean there is further for this to fall, but it has come down hard over the last three days and it is possibly setting up for a bounce. However, like most of the other charts, the double bottom holding is possibly the only hope to hold off another major decline.
The EFA (I-fund) is flirting with some longer term support as it finds its way back near the lower end of that red wide channel. With that very obvious lower high in February, the concern here is an equally meaningful lower low that could take it down near the 71 area. Support is here and now, and it needs to hold.
BND (Bonds / F-fund) was down a bit as the recent move higher is nearing the top of the recent descending trading channel again. The fact that bonds did not rally yesterday may tell us that this stock market sell off is still more about the Fed than Russia invading the Ukraine.
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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Bonds and the dollar were mostly flat and the yield on the 10-year Treasury was up just slightly.
Right now the market is trading off of the Ukraine border headlines, and I think that is mostly an excuse, although the potential for war could negatively impact the economy. However, if that is the case, perhaps the Fed will not be as hawkish at their March FOMC meeting. But overall, most people don't know exactly why the market is going up or down, so the obvious catalyst gets exaggerated and becomes the only topic of conversation on the financial television news.
Technically the indices are looking to test the January lows, and the Nasdaq 100 large cap tech stock index has already touched those levels. Yes, it could breakdown, take out some stops, but as we head toward the end of the month and start of a new one, we could see something similar to what happened in late January / early February. The question is whether any relief rally on a successful test of the lows will get sold quickly, or if we finally see a bottom form.
Not that the Russian stock market has anything to do with our TSP, but from a technical analysis standpoint, this is what happened yesterday to their market, as stocks declined more than 10% erasing any possible double bottom, and creating a lower low.
Will that happen here? It could, but they have a lot more to lose than we do. Ironically the war over there may not be as impactful as say a trucker protest here, like the one in Canada. That would disrupt the supply chain more than it is already, so that may turn out to be a bigger story. There's a lot of issues out there right now so I am still in a defensive mode and any buys I make are with the intention of taking profits quickly. There should be opportunities for those who are nimble.
Consumer Confidence came in higher than expected, and it's a busy economic week with the Michigan Consumer Sentiment report, new GDP estimates, Personal Spending and Income reports, plus the weekly jobless numbers, all on the docket, so we have some catalysts outside of the Russian headlines.
Right now the market is trading off of the Ukraine border headlines, and I think that is mostly an excuse, although the potential for war could negatively impact the economy. However, if that is the case, perhaps the Fed will not be as hawkish at their March FOMC meeting. But overall, most people don't know exactly why the market is going up or down, so the obvious catalyst gets exaggerated and becomes the only topic of conversation on the financial television news.
Technically the indices are looking to test the January lows, and the Nasdaq 100 large cap tech stock index has already touched those levels. Yes, it could breakdown, take out some stops, but as we head toward the end of the month and start of a new one, we could see something similar to what happened in late January / early February. The question is whether any relief rally on a successful test of the lows will get sold quickly, or if we finally see a bottom form.
Not that the Russian stock market has anything to do with our TSP, but from a technical analysis standpoint, this is what happened yesterday to their market, as stocks declined more than 10% erasing any possible double bottom, and creating a lower low.
Will that happen here? It could, but they have a lot more to lose than we do. Ironically the war over there may not be as impactful as say a trucker protest here, like the one in Canada. That would disrupt the supply chain more than it is already, so that may turn out to be a bigger story. There's a lot of issues out there right now so I am still in a defensive mode and any buys I make are with the intention of taking profits quickly. There should be opportunities for those who are nimble.
Consumer Confidence came in higher than expected, and it's a busy economic week with the Michigan Consumer Sentiment report, new GDP estimates, Personal Spending and Income reports, plus the weekly jobless numbers, all on the docket, so we have some catalysts outside of the Russian headlines.
The S&P 500 (C-fund) made its lowest close of the year yesterday. It started to shape up as a Turnaround Tuesday, but some late selling smacked the indices back down after the midday rally off the lows. The chances of a test of the lows, and even a lower low are certainly there, but we could also see some buying before that happens because of some of the extremes we are seeing in the indicators.
The DWCPF (small caps / S-fund) lagged and surprisingly it has not as close to its January lows as the S&P 500 and Nasdaq. That could mean there is further for this to fall, but it has come down hard over the last three days and it is possibly setting up for a bounce. However, like most of the other charts, the double bottom holding is possibly the only hope to hold off another major decline.
The EFA (I-fund) is flirting with some longer term support as it finds its way back near the lower end of that red wide channel. With that very obvious lower high in February, the concern here is an equally meaningful lower low that could take it down near the 71 area. Support is here and now, and it needs to hold.
BND (Bonds / F-fund) was down a bit as the recent move higher is nearing the top of the recent descending trading channel again. The fact that bonds did not rally yesterday may tell us that this stock market sell off is still more about the Fed than Russia invading the Ukraine.
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.
