Stocks rallied early on Wednesday but it didn't take long for the relief rally to run out of steam. The negative swing was typical in a volatile market and it's rarely as easy a s "V bottom reversal. We can speculate, but when this ends, and from what point the market turns around is anyone's guess, but you can try to limit damage by raising cash on rallies, or buying into deep plunges. There's no specific formula - the trading is running on a lot of emotion right now.
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I am going to keep this paragraph up this week as a reminder -- I am on vacation this week, and this is typical market action when I take a vacation. I have said this a few times already but it's uncanny how this happens whenever I try to take a little time off. I plan to make a brief update each day here, to keep myself informed in this environment. My email correspondence may be a little slow but I will attempt to check it a couple of times each day. The AutoTracker updates may not be on its normal schedule either. My apologies in for any inconvenience.
As I was afraid of, the relief rally didn't have any staying power, and to not even hold for a second day was concerning. The indices could churn near the recent lows as part of a test of the lows, but what could also happen is that we get another leg lower. A lot of that may depend on the weekly initial jobless claims report that comes out this morning before the opening bell.
A lot of stocks have really been beaten down so there is always a chance of some bargain hunting, but the economy is potentially taking a turn for the worst, and if that is the case, then this decline may just be getting started. It's difficult to say. Investors will take it report by report going forward to get the read on the economic conditions.
As we've talked about before, the jobs report did trigger some of this but if it was a weather driven anomaly, then other data will prove or disprove that, and today's jobless claim may be the first evidence either way.
Again, I'm watching the indices and the charts tell me a lot of what I need to know, but I am not getting a great feel of the fear levels without listening to the pundits on TV. The best time to buy is when all, or most, of them are suggesting the worst is still to come. I'm most concerned when they are all in agreement that it is time to buy this decline, so that's the "feel" I am missing out on right now being on vacation.
The S&P 500 (C-fund) was up big early but volatility is here and big swings are going to occur. There was an attempt to fill in that first overhead open gap, and it was partially filled, but it closed near the lows of the day and isn't far from testing Monday's lows. A test of the lows shouldn't scare us as that is typical when forming a bottom, but what should scare us is if Monday's lows get taken out. If this was a longer term chart you would see that there is an open gap a little lower than Monday's lows, just below 5100.
Thanks so much for reading! We'll see you back here tomorrow with another vacation-shortened commentary.
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.html
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.
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I am going to keep this paragraph up this week as a reminder -- I am on vacation this week, and this is typical market action when I take a vacation. I have said this a few times already but it's uncanny how this happens whenever I try to take a little time off. I plan to make a brief update each day here, to keep myself informed in this environment. My email correspondence may be a little slow but I will attempt to check it a couple of times each day. The AutoTracker updates may not be on its normal schedule either. My apologies in for any inconvenience.
As I was afraid of, the relief rally didn't have any staying power, and to not even hold for a second day was concerning. The indices could churn near the recent lows as part of a test of the lows, but what could also happen is that we get another leg lower. A lot of that may depend on the weekly initial jobless claims report that comes out this morning before the opening bell.
A lot of stocks have really been beaten down so there is always a chance of some bargain hunting, but the economy is potentially taking a turn for the worst, and if that is the case, then this decline may just be getting started. It's difficult to say. Investors will take it report by report going forward to get the read on the economic conditions.
As we've talked about before, the jobs report did trigger some of this but if it was a weather driven anomaly, then other data will prove or disprove that, and today's jobless claim may be the first evidence either way.
Again, I'm watching the indices and the charts tell me a lot of what I need to know, but I am not getting a great feel of the fear levels without listening to the pundits on TV. The best time to buy is when all, or most, of them are suggesting the worst is still to come. I'm most concerned when they are all in agreement that it is time to buy this decline, so that's the "feel" I am missing out on right now being on vacation.
The S&P 500 (C-fund) was up big early but volatility is here and big swings are going to occur. There was an attempt to fill in that first overhead open gap, and it was partially filled, but it closed near the lows of the day and isn't far from testing Monday's lows. A test of the lows shouldn't scare us as that is typical when forming a bottom, but what should scare us is if Monday's lows get taken out. If this was a longer term chart you would see that there is an open gap a little lower than Monday's lows, just below 5100.
Thanks so much for reading! We'll see you back here tomorrow with another vacation-shortened commentary.
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.html
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.
