The only consistency we are are seeing in the stock market recently is its inconsistency. We went from broad strength on Monday to narrow strength yesterday. Large cap techs were up yesterday, while the broader indices gave back Monday's gains. It's as if everyone is either piling into Nvidia and the like while everything else suffers, or they're selling Nvidia et al., and buying the smaller stuff. Yields were down pushing bonds up slightly.
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Turnaround Tuesday?
The Dow was up 0.67% on Monday, and down 0.76% yesterday.
The S&P 500 was down 0.31% on Monday, and up 0.39% yesterday.
The Nasdaq was down 1.09% on Monday, and up 1.26% yesterday.
The S-fund was up 0.40% on Monday, and down 0.47% yesterday.
The I-fund was up 0.69% on Monday, and up 0.24% again yesterday? We have a winner!
Bonds were also up modestly on both days.
Here's the breakdown of the weak breath numbers despite the big green numbers in the S&P 500 and Nasdaq - the opposite of what we saw on Monday.
The small caps (S-fund) have been intriguing as they have been holding steady for the last month - breaking some descending resistance, but so far failing to get back above the 50-day EMA. I'm also looking at the regional bank index (KRE) and yesterday it was down sharply and I can't help but notice how similar the charts are.
This may be the make or break chart if the small caps (S-fund) are going to make a move on the leading S&P 500 (C-fund.)
The Dow Transportation Index is also looking intriguing, While it made a strong move for half a day on Monday, like everything else it moved in the opposite direction yesterday, but in the process it may have created a positive reversal formation. Like the small caps, it has been struggling to get back above its 50-day EMA - something that defines a weaker chart, but yesterday after the bell FedEx was trading up over 15% and maybe that could help nudge this index over that moving average?
The 10-year Treasury Yield was down but some perhaps unnecessary comments from one of the Fed governors, Michelle Bowman, sent yields higher after a weak open after saying she still sees inflation risk and she would be willing to RAISE interest rates. So, despite a bearish looking flag on the 10-year, it can't seem to get off that sticky 4.25% area.
On Friday we'll get the PCE Prices and Personal Income and Spending reports. Investors are hopeful that it will be favorable to the inflation situation, but apparently the Fed governors are not as optimistic. Also on Friday we'll get the Chicago PMI report which was historically low last month.
The S&P 500 (C-fund) continues to have a bid as the dip buyers love big tech and they are going to buy weakness - until proven otherwise. The choppy action leaves that open gap in play as a possible pullback target, and that would give the dip buyers a reason to buy if they let it get that low.
DWCPF (S-fund) has been up 7 times this month, and down 9. It has been inconsistent in a bearish trend. The shorter term channel (blue) did get broken on the upside but it is still battling that red channel which is heading lower.
The EFA (I-fund) has been battling back and it even overcame some strength in the dollar yesterday to close up moderately. The open gaps above and below make it tough to know where it will go in the very short term, and the longer term battle is between what could be a bullish looking flag, and a new down trend.
BND (bonds / F-fund) has been slowly climbing in recent days but it remains entrenched in that old gap from February. Yields look like they should break down but since they have refused to do so despite the set up, there may be more to it than we see. Perhaps the bond market is on hold until Friday's inflation data gets here.
Thanks so much for reading! We'll see you back here tomorrow.
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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Turnaround Tuesday?
The Dow was up 0.67% on Monday, and down 0.76% yesterday.
The S&P 500 was down 0.31% on Monday, and up 0.39% yesterday.
The Nasdaq was down 1.09% on Monday, and up 1.26% yesterday.
The S-fund was up 0.40% on Monday, and down 0.47% yesterday.
The I-fund was up 0.69% on Monday, and up 0.24% again yesterday? We have a winner!
Bonds were also up modestly on both days.
Here's the breakdown of the weak breath numbers despite the big green numbers in the S&P 500 and Nasdaq - the opposite of what we saw on Monday.
The small caps (S-fund) have been intriguing as they have been holding steady for the last month - breaking some descending resistance, but so far failing to get back above the 50-day EMA. I'm also looking at the regional bank index (KRE) and yesterday it was down sharply and I can't help but notice how similar the charts are.
This may be the make or break chart if the small caps (S-fund) are going to make a move on the leading S&P 500 (C-fund.)
The Dow Transportation Index is also looking intriguing, While it made a strong move for half a day on Monday, like everything else it moved in the opposite direction yesterday, but in the process it may have created a positive reversal formation. Like the small caps, it has been struggling to get back above its 50-day EMA - something that defines a weaker chart, but yesterday after the bell FedEx was trading up over 15% and maybe that could help nudge this index over that moving average?
The 10-year Treasury Yield was down but some perhaps unnecessary comments from one of the Fed governors, Michelle Bowman, sent yields higher after a weak open after saying she still sees inflation risk and she would be willing to RAISE interest rates. So, despite a bearish looking flag on the 10-year, it can't seem to get off that sticky 4.25% area.
On Friday we'll get the PCE Prices and Personal Income and Spending reports. Investors are hopeful that it will be favorable to the inflation situation, but apparently the Fed governors are not as optimistic. Also on Friday we'll get the Chicago PMI report which was historically low last month.
The S&P 500 (C-fund) continues to have a bid as the dip buyers love big tech and they are going to buy weakness - until proven otherwise. The choppy action leaves that open gap in play as a possible pullback target, and that would give the dip buyers a reason to buy if they let it get that low.
DWCPF (S-fund) has been up 7 times this month, and down 9. It has been inconsistent in a bearish trend. The shorter term channel (blue) did get broken on the upside but it is still battling that red channel which is heading lower.
The EFA (I-fund) has been battling back and it even overcame some strength in the dollar yesterday to close up moderately. The open gaps above and below make it tough to know where it will go in the very short term, and the longer term battle is between what could be a bullish looking flag, and a new down trend.
BND (bonds / F-fund) has been slowly climbing in recent days but it remains entrenched in that old gap from February. Yields look like they should break down but since they have refused to do so despite the set up, there may be more to it than we see. Perhaps the bond market is on hold until Friday's inflation data gets here.
Thanks so much for reading! We'll see you back here tomorrow.
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.
