The action on Wednesday was wobbly but the bears couldn't seal the deal and the negative morning turned into some dip buying by midday, and that was enough to push the Dow and S&P 500 into positive territory by the close, and the Nasdaq and small caps escaped weak early trading with just minor losses. The dollar rallied up near recent highs keeping the pressure on the I-fund, and the F-fund managed a gain despite another move higher in the 10-year yield.
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.php
I hope everyone enjoyed their day off as the country remembered, and laid to rest, former President James Earl Carter. May he rest in peace. Also, our thoughts and prayers go out to those in the Los Angeles area dealing those horrific fires.
It's Thursday evening as I write this and the futures are fairly negative but we have the December jobs report coming out Friday morning and that could change things. Estimates are looking for a gain of 154,000 jobs and an unemployment rate of 4.2%. The market needs good news because the charts are not telling a very encouraging story.
Chart formations are tendencies, not guarantees, but the charts are leaning toward a bearish outcome. Perhaps the jobs report can change things and mend those charts, but the bear flags I will show you on several of these charts go back 5 - 6 weeks so it may take more than one economic report, or one major surprise in this jobs report, to negate these formations.
On Wednesday the internal data was fairly negative despite the gains in the S&P 500. Trading volume was 2 to 1 in favor of declining shares over advancing, and equally concerning is the ratio of new 52-week lows we are seeing on the NYSE and Nasdaq exchanges.
Seeing a 6 to 1 ratio of new 52-week lows over new highs is a sign of veiled weakness in a market were the S&P is just 3% off of its all time highs. On the other hand, the S&P 500 is been holding up extremely well over the last couple of years despite several signs of internal weakness, so it has been tough to consider getting too bearish. But if big tech starts to give out, and we saw Nvidia drop sharply earlier this week, and if yields keep rising, things could change.
Once again we see the 10-year Treasury Yield moving a little too quickly to the upside. As I said before, a yield of 4.5% or 4.7% isn't a market killer, but if it continues to trend higher, investors may start looking at bonds as a good alternative to a stock market that has been up 20% plus for two straight years pushing valuations (price to earnings) near all time highs.
The rising dollar isn't a big problem for the small caps, but at some point the larger global US companies could be impacted, and of course the I-fund has been showing what a strong dollar can do to international stock markets.
But let's go over the charts that are concerning me. Bear flags tend to break down. Not 100% of the time so we may get surprised, but even if it is a self-fulfilling prophesy because traders understand that bear flags break down, it could trigger selling.
The Dow Transportation Index, the Russell 2000, the S-fund's DWCPF, and the I-fund (AWCX) all have clear bearish flags fully formed.
Even the QQQ large cap tech stocks chart has a hint of a bear flag although it is above the 50-day EMA and that's a positive. Bonds are the first to break down from its bear flag and it is trading below its 200-day EMA as yields continue to move higher than most of us expected.
So, the bulls are not dead and the calendar is mostly on their side in January, but there are certainly reasons to question the bullish case based on the rise in yields and the formations in the charts.
Admin note: We are offering a discount on our annual subscriptions to new and current subscribers until Jan 18. You can sign up to a new service or add a year or two (in some cases) to your current subscription for 20% off the regular price (or 50% in some cases.) Use this link for more information: TSP Talk - Annual Subscription Sale
The S&P 500 (C-fund) was up slightly on Wednesday but at its highs of the day it stalled at the 50-day EMA. It's trending lower since the early December peak so it could be a healthy digestion of the post-election rally, but it needs to stabilize at these support areas near the moving averages and the support lines. The open gap from early November is still half open.
DWCPF (S-fund) was down slightly on Wednesday but it did close near its highs of the day after gaining back a big morning loss. It remains in the ominous bear flag, and as I have been saying, bear flags tend to break down, although not always, and it continues to hold above that 100-day EMA.
ACWX (the I-fund tracking index) was down 0.08% on Wednesday and the I-fund was given a loss of 0.22%, perhaps making up some for Tuesday's price which was higher than the ACWX suggested.
BND (bonds / F-fund) was the first of the bear flag to break down and it closed below the 200-day EMA for a 4th straight day.
Thanks so much for reading! Have a great weekend!
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.php
I hope everyone enjoyed their day off as the country remembered, and laid to rest, former President James Earl Carter. May he rest in peace. Also, our thoughts and prayers go out to those in the Los Angeles area dealing those horrific fires.
It's Thursday evening as I write this and the futures are fairly negative but we have the December jobs report coming out Friday morning and that could change things. Estimates are looking for a gain of 154,000 jobs and an unemployment rate of 4.2%. The market needs good news because the charts are not telling a very encouraging story.
Chart formations are tendencies, not guarantees, but the charts are leaning toward a bearish outcome. Perhaps the jobs report can change things and mend those charts, but the bear flags I will show you on several of these charts go back 5 - 6 weeks so it may take more than one economic report, or one major surprise in this jobs report, to negate these formations.
On Wednesday the internal data was fairly negative despite the gains in the S&P 500. Trading volume was 2 to 1 in favor of declining shares over advancing, and equally concerning is the ratio of new 52-week lows we are seeing on the NYSE and Nasdaq exchanges.
Seeing a 6 to 1 ratio of new 52-week lows over new highs is a sign of veiled weakness in a market were the S&P is just 3% off of its all time highs. On the other hand, the S&P 500 is been holding up extremely well over the last couple of years despite several signs of internal weakness, so it has been tough to consider getting too bearish. But if big tech starts to give out, and we saw Nvidia drop sharply earlier this week, and if yields keep rising, things could change.
Once again we see the 10-year Treasury Yield moving a little too quickly to the upside. As I said before, a yield of 4.5% or 4.7% isn't a market killer, but if it continues to trend higher, investors may start looking at bonds as a good alternative to a stock market that has been up 20% plus for two straight years pushing valuations (price to earnings) near all time highs.
The rising dollar isn't a big problem for the small caps, but at some point the larger global US companies could be impacted, and of course the I-fund has been showing what a strong dollar can do to international stock markets.
But let's go over the charts that are concerning me. Bear flags tend to break down. Not 100% of the time so we may get surprised, but even if it is a self-fulfilling prophesy because traders understand that bear flags break down, it could trigger selling.
The Dow Transportation Index, the Russell 2000, the S-fund's DWCPF, and the I-fund (AWCX) all have clear bearish flags fully formed.
Even the QQQ large cap tech stocks chart has a hint of a bear flag although it is above the 50-day EMA and that's a positive. Bonds are the first to break down from its bear flag and it is trading below its 200-day EMA as yields continue to move higher than most of us expected.
So, the bulls are not dead and the calendar is mostly on their side in January, but there are certainly reasons to question the bullish case based on the rise in yields and the formations in the charts.
Admin note: We are offering a discount on our annual subscriptions to new and current subscribers until Jan 18. You can sign up to a new service or add a year or two (in some cases) to your current subscription for 20% off the regular price (or 50% in some cases.) Use this link for more information: TSP Talk - Annual Subscription Sale
The S&P 500 (C-fund) was up slightly on Wednesday but at its highs of the day it stalled at the 50-day EMA. It's trending lower since the early December peak so it could be a healthy digestion of the post-election rally, but it needs to stabilize at these support areas near the moving averages and the support lines. The open gap from early November is still half open.
DWCPF (S-fund) was down slightly on Wednesday but it did close near its highs of the day after gaining back a big morning loss. It remains in the ominous bear flag, and as I have been saying, bear flags tend to break down, although not always, and it continues to hold above that 100-day EMA.
ACWX (the I-fund tracking index) was down 0.08% on Wednesday and the I-fund was given a loss of 0.22%, perhaps making up some for Tuesday's price which was higher than the ACWX suggested.
BND (bonds / F-fund) was the first of the bear flag to break down and it closed below the 200-day EMA for a 4th straight day.
Thanks so much for reading! Have a great weekend!
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.
