Stocks opened mixed on Thursday but gave way when a wave of selling was triggered after lunch. We saw modest gains in some indices become sharp losses, and by the close the Dow was down 354-points. The small caps of the Russell 2000 were up well over 1% in early trading and while they held up better than the large caps, they did lose all of those gains to close flat. The S-fund closed in between the Russell's break even day, and the S&P 500's 1.23% loss.
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We got an Initial Jobless Claims report yesterday and it came in weaker than expected, setting the tone for a day of profit taking.
Tis' the season. We hadn't seen much of yet, but as is often the case, this is the time of July when we tend get some of that profit taking during earnings season.
Going into Thursday, Microsoft and Tesla both posted very solid earnings, but both stocks had also been roaring for weeks and a "sell the news" reaction wasn't too much of a surprise. The broader market came down with them, but most of the damage was done to the big tech stocks, which also bled into the S&P 500 and Dow, but the small caps held up rather well considering so it wasn't an all out sell-off for stocks.
After the bell yesterday Intel posted a strong report, beating estimates handily, but then disappointed with their 3rd quarter guidance so the stock was paying the price in after hours trading. It's not the bellwether stock or market mover that it used to be, but it is still a component of the Dow, S&P and Nasdaq and it could add some pressure to stocks today.
The market is following the negotiations in Washington regarding the next wave of stimulus and unemployment benefits. Mitch McConnell said the republicans will release their coronavirus relief plan early next week, but that means there could be a gap in the $600 per week unemployment benefit payout as the deadline to extend that expires at the end of the month.
The S&P 500 (C-fund) headed south in afternoon trading on Thursday and that sent the chart down to test the old breakout area. It closed just above that double dose of support with that rising support line coming off the prior lows. A move to the 20-day EMA would be normal, but it would have to break that double support line to get there.
The DWCPF (S-fund) was breaking out and looking good in early trading, but just like we saw back on July 13, early gains were quickly given back by the close. It did close just below that old June 8 peak so we have the potential for a failed breakout, and as we've said before that open gap near 1430 is going to be a lure.
The EFA (I-fund) was in the same situation as the small caps - a follow up to the breakout became a slight failure with the open gap pulling it down. 62.50 to 63.00 shows some potential support.
The Nasdaq has been flying for weeks now and here it is yet again down testing the 20-day EMA, which has held time and again since the move above it in early April. Will the 7th time be the charm for the bears, or can the bulls pull off another dip buyer's special?
Surprise, surprise! BND (bond ETF) was up again, as the yields just keep drifting lower.
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. Have a great weekend!
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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We got an Initial Jobless Claims report yesterday and it came in weaker than expected, setting the tone for a day of profit taking.
Tis' the season. We hadn't seen much of yet, but as is often the case, this is the time of July when we tend get some of that profit taking during earnings season.
Going into Thursday, Microsoft and Tesla both posted very solid earnings, but both stocks had also been roaring for weeks and a "sell the news" reaction wasn't too much of a surprise. The broader market came down with them, but most of the damage was done to the big tech stocks, which also bled into the S&P 500 and Dow, but the small caps held up rather well considering so it wasn't an all out sell-off for stocks.
After the bell yesterday Intel posted a strong report, beating estimates handily, but then disappointed with their 3rd quarter guidance so the stock was paying the price in after hours trading. It's not the bellwether stock or market mover that it used to be, but it is still a component of the Dow, S&P and Nasdaq and it could add some pressure to stocks today.
The market is following the negotiations in Washington regarding the next wave of stimulus and unemployment benefits. Mitch McConnell said the republicans will release their coronavirus relief plan early next week, but that means there could be a gap in the $600 per week unemployment benefit payout as the deadline to extend that expires at the end of the month.
The S&P 500 (C-fund) headed south in afternoon trading on Thursday and that sent the chart down to test the old breakout area. It closed just above that double dose of support with that rising support line coming off the prior lows. A move to the 20-day EMA would be normal, but it would have to break that double support line to get there.
The DWCPF (S-fund) was breaking out and looking good in early trading, but just like we saw back on July 13, early gains were quickly given back by the close. It did close just below that old June 8 peak so we have the potential for a failed breakout, and as we've said before that open gap near 1430 is going to be a lure.
The EFA (I-fund) was in the same situation as the small caps - a follow up to the breakout became a slight failure with the open gap pulling it down. 62.50 to 63.00 shows some potential support.
The Nasdaq has been flying for weeks now and here it is yet again down testing the 20-day EMA, which has held time and again since the move above it in early April. Will the 7th time be the charm for the bears, or can the bulls pull off another dip buyer's special?
Surprise, surprise! BND (bond ETF) was up again, as the yields just keep drifting lower.
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. Have a great weekend!
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.
