It was another day of outright selling in the stock market, and even a decline in Treasury yields couldn't help. Whether it's profit taking, pension Fund rebalancing, or just "normal" selling, I don't know, but we know the calendar has a bullish bias this week, so this is unusual. Small caps slightly outperformed the large caps as big tech struggled again. Bonds were up nicely on the lower yields.
Again, I'm still in semi-vacation mode and I will make this quick, but I will be checking in every day.
The interesting thing about yesterday's selling was that yields were down and possibly breaking below rising support, which I would have figured would be a good thing for investors to see, but it's an odd time of year with light trading volume and someone or something is pushing the indices round.
It could turn out to be building a launching pad for stocks for the start of 2025, but that's certainly not how I expected it to play out. All we can do is try to figure out the whats and whys and try to get on the correct side of the next move.
Here's the 10-year Treasury Yield and we did see a modest breakdown from a rising support line, although technically there's another layer of support near 4.5%. If 4.5% fails to hold I would suspect stocks would resume their upside.
The Dow Transportation Index was lagging badly for the first couple of weeks in December, waving a red flag, but the bulls were expecting the Santa Claus effect to keep the S&P 500 and other major averages afloat into the end of the year. It was not be be. But now the Transports are holding at their 200-day EMA while the S&P 500 and small caps were selling off in the last few days, giving it a positive divergence. That 200-day average really needs to hold if we want to see any kind of rally in early January.
The price of oil has been trading in a tight range for months which hasn't been giving us many clues about the state of the economy except to say that there may not be high or low expectations. Just stability, which I suppose is a good thing.
The stock market and the TSP will be closed tomorrow, but I just saw that the US stock markets will also close Jan. 9, in observance of a national day of mourning for former President Jimmy Carter. I'm not sure about the TSP but I assume they will also be closed. I will update you when I find out for sure.
The S&P 500 (C-fund) was down sharply but it did close well off the lows again, and above that old open gap. It does look like a head and shoulders pattern has formed. The interesting thing about head and shoulders patterns is that they are not always bearish. They are very bearish in down trending markets, but in upward trending markets they can be continuation patterns, meaning in they form in an uptrend, the support of the neckline could hold. That would be near 5860.
DWCPF (S-fund) retested and held again at the 100-day EMA yesterday. It is stuck in an area between support and resistance and something is going to have to give. The bear flag look is not a good one, but a double bottom low is not out of the question.
ACWX (the I-fund tracking index) was down 0.72% yesterday, and the I-fund was given a loss of 0.53%.
BND (bonds / F-fund) had a good day as yields finally eased off the recent highs. Even better is that this chart bounced back above the 200-day EMA after breaking the December downtrend. There's a chance that yields have peaked, and that would really help the F-fund - if not stocks as well.
Thanks so much for reading! Happy New Year! We'll see you back here on Thursday.
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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.
| Daily TSP Funds Return
More returns |
You can see the latest updated TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.phpAgain, I'm still in semi-vacation mode and I will make this quick, but I will be checking in every day.
The interesting thing about yesterday's selling was that yields were down and possibly breaking below rising support, which I would have figured would be a good thing for investors to see, but it's an odd time of year with light trading volume and someone or something is pushing the indices round.
It could turn out to be building a launching pad for stocks for the start of 2025, but that's certainly not how I expected it to play out. All we can do is try to figure out the whats and whys and try to get on the correct side of the next move.
Here's the 10-year Treasury Yield and we did see a modest breakdown from a rising support line, although technically there's another layer of support near 4.5%. If 4.5% fails to hold I would suspect stocks would resume their upside.
The Dow Transportation Index was lagging badly for the first couple of weeks in December, waving a red flag, but the bulls were expecting the Santa Claus effect to keep the S&P 500 and other major averages afloat into the end of the year. It was not be be. But now the Transports are holding at their 200-day EMA while the S&P 500 and small caps were selling off in the last few days, giving it a positive divergence. That 200-day average really needs to hold if we want to see any kind of rally in early January.
The price of oil has been trading in a tight range for months which hasn't been giving us many clues about the state of the economy except to say that there may not be high or low expectations. Just stability, which I suppose is a good thing.
The stock market and the TSP will be closed tomorrow, but I just saw that the US stock markets will also close Jan. 9, in observance of a national day of mourning for former President Jimmy Carter. I'm not sure about the TSP but I assume they will also be closed. I will update you when I find out for sure.
The S&P 500 (C-fund) was down sharply but it did close well off the lows again, and above that old open gap. It does look like a head and shoulders pattern has formed. The interesting thing about head and shoulders patterns is that they are not always bearish. They are very bearish in down trending markets, but in upward trending markets they can be continuation patterns, meaning in they form in an uptrend, the support of the neckline could hold. That would be near 5860.
DWCPF (S-fund) retested and held again at the 100-day EMA yesterday. It is stuck in an area between support and resistance and something is going to have to give. The bear flag look is not a good one, but a double bottom low is not out of the question.
ACWX (the I-fund tracking index) was down 0.72% yesterday, and the I-fund was given a loss of 0.53%.
BND (bonds / F-fund) had a good day as yields finally eased off the recent highs. Even better is that this chart bounced back above the 200-day EMA after breaking the December downtrend. There's a chance that yields have peaked, and that would really help the F-fund - if not stocks as well.
Thanks so much for reading! Happy New Year! We'll see you back here on Thursday.
Tom Crowley
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
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
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.
