Stocks were mixed but mostly lower yesterday as the Dow lost 128-points, and small caps gave back Monday's gains and then some. The S&P 500 was down slightly, while the Nasdaq held onto a small gain as the large tech stocks bounced back some. After opening lower, yields inched higher by the close and that put more pressure on stocks as the day wore on.
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It was mostly a quiet day in front of today's FOMC policy statement, and with yields still moving higher, investors seemed a little tentative to do much buying in case the Fed makes any changes to their outlook on interest rates.
Internally the numbers weren't good and argument can be made that it was a needed day of rest after the recent 7-day rally. Only the FAANG type stocks held up as you can see declining share volume was easily outpacing the advancing volume, even on the Nasdaq.
The price of oil has been consolidating lately, but the trend is still up and the 20-day EMA has been repeatedly holding each time it has tested the the 20-day EMA over last several months. There is a pretty strong correlation between the price of oil and the S&P 500 - that is until this recent 7 day rally when stocks kept moving higher while the price oil was moving sideways. It will be interesting to see if the S&P 500 can continue higher without a consolidation, if the price of oil successfully tests that 20-day average and moves higher again.
All eyes are on the Fed and not much else matters today, although investors know that the Fed is watching that 10-year yield, and the concern is that they may consider putting interest rate hikes back on the table if those yields continue to rise, so the market is on a yield sensitivity watch.
March Madness is back. If you're interested in joining our free NCAA bracket contest, please go here for more information: https://www.tsptalk.com/mb/site-news-and-announcements/36406-march-madness-contest-2021-a.html
The S&P 500 (C-fund) was down but so far it has held above the breakout line, which would obviously be a more favorable outcome, rather than a failed breakout. But you can see that some consolidation after a breakout is normal, although recently we did see a couple meaningful pullbacks after a failed breakout, so keep an eye on that 3950 area.
The DWCPF (small caps / S-fund) gave up Monday's gains yesterday, and while it wasn't a great day, it's not a deal breaker for its quest to retest those old highs. The 2170 area may be a key level of support in this quest.
The EFA (I-fund) is testing that flat top area, and it could be a resistance area for a few days, as it was yesterday. If not, and we do see a move above 76.50, we could see some consolidation above that line like we saw in February
The Dow Transportation Index took a needed rest yesterday, and unfortunately it may need to take a bigger break after running up from 12,000 to 14,250 in almost a straight line over the last six weeks. It tagged that overhead resistance (red) and backed off, but now it is testing the shorter term rising blue channel's support line. Something will have to give.
Yields up, bond prices down. BND (bonds / F-fund) is flirting again with another new low. The Fed could shake things up here today.
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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It was mostly a quiet day in front of today's FOMC policy statement, and with yields still moving higher, investors seemed a little tentative to do much buying in case the Fed makes any changes to their outlook on interest rates.
Internally the numbers weren't good and argument can be made that it was a needed day of rest after the recent 7-day rally. Only the FAANG type stocks held up as you can see declining share volume was easily outpacing the advancing volume, even on the Nasdaq.
The price of oil has been consolidating lately, but the trend is still up and the 20-day EMA has been repeatedly holding each time it has tested the the 20-day EMA over last several months. There is a pretty strong correlation between the price of oil and the S&P 500 - that is until this recent 7 day rally when stocks kept moving higher while the price oil was moving sideways. It will be interesting to see if the S&P 500 can continue higher without a consolidation, if the price of oil successfully tests that 20-day average and moves higher again.
All eyes are on the Fed and not much else matters today, although investors know that the Fed is watching that 10-year yield, and the concern is that they may consider putting interest rate hikes back on the table if those yields continue to rise, so the market is on a yield sensitivity watch.
March Madness is back. If you're interested in joining our free NCAA bracket contest, please go here for more information: https://www.tsptalk.com/mb/site-news-and-announcements/36406-march-madness-contest-2021-a.html
The S&P 500 (C-fund) was down but so far it has held above the breakout line, which would obviously be a more favorable outcome, rather than a failed breakout. But you can see that some consolidation after a breakout is normal, although recently we did see a couple meaningful pullbacks after a failed breakout, so keep an eye on that 3950 area.
The DWCPF (small caps / S-fund) gave up Monday's gains yesterday, and while it wasn't a great day, it's not a deal breaker for its quest to retest those old highs. The 2170 area may be a key level of support in this quest.
The EFA (I-fund) is testing that flat top area, and it could be a resistance area for a few days, as it was yesterday. If not, and we do see a move above 76.50, we could see some consolidation above that line like we saw in February
The Dow Transportation Index took a needed rest yesterday, and unfortunately it may need to take a bigger break after running up from 12,000 to 14,250 in almost a straight line over the last six weeks. It tagged that overhead resistance (red) and backed off, but now it is testing the shorter term rising blue channel's support line. Something will have to give.
Yields up, bond prices down. BND (bonds / F-fund) is flirting again with another new low. The Fed could shake things up here today.
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.
