Stocks sold off on Monday to start the pre-holiday week of trading. The action is poor and the Fed hangover continues. The Dow lost 163-points, which was actually about half of the lowest levels of the day so there was some late buying.
Santa Claus is supposed to show up soon, but he must be stuck in traffic somewhere. If you see him in your rearview mirror, can you nudge over and give him some room? Officially he has until the 21st or so before the seasonality bullish bias really kicks in.
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The S&P 500 (C-fund) was down almost 1% yesterday, and while we did see some buying in the final hour, we have seen the index close off its lows for 5 days in a row but it hasn't helped. Trading volume started to dry up as we'd expect to happen after an options expiration and during the holidays. The open gap from that CPI rally in November was finally filled yesterday, although arguably that gap was really started at the November 9th closing price near 3750. How low will they take this before a bounce? Probably low enough to try to get folks to say uncle, and sell. Then the Santa Claus rally will kick in. Nerves are getting frayed and the fear is getting palpable.
I can't help but feel that bigger traders and money managers are able to push us smaller guys around. We often get knocked out of losing trades, only for it to move back in our favor after we've sold. There's reasons for that including that they can see our limit and stop orders out there like sitting ducks, and of course they are just better at this and know how to push us around.
So, every year, even though I know it is supposed to happen, I feel like they might take advantage of all of us traders who are waiting for a Santa Claus rally, and in a way they do, but not totally. We have seen a lot of sell offs in recent years before Christmas and this may be their effort to get some buyers to back off, but it seems like they are never able to fully avoid a rally at some point in the final two weeks of December, no matter how poorly the market is doing. Of course they are usually the ones doing the heavy buying once they've scared everyone else out, which triggers the rally, then the herd eventually follows.
I've posted some of these before but here are some prior years, including the terrible December of 2018, the bear market years of 2008, 2001, and 2000. Without exception, there's a decent rally a some point in the final two weeks in December. Of course now that I'm pounding the table it probably won't happen - we know how that goes. 8^\
Here's one for you. I saw someone posted this information from the Philadelphia Federal Reserve showing an extraordinary distortion of what we have been told. I really don't see anyone else talking about it so maybe I am misunderstanding what I am seeing, or they are trying to hide it from us.
Do you know how the market reacts when the monthly jobs report get released on the first Friday of every month? Well what if we found out that what they were releasing all of those months was complete misinformation?
Here's the headline:
Job Gains This Year Overstated by 1.1 Million, Philadelphia Fed Reveals
"In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.
"Payroll jobs in the nation remained essentially flat from March through June 2022 after adjusting for QCEW data:"
https://freerepublic.com/focus/f-bloggers/4117423/posts
[url]https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/benchmark-revisions/early-benchmark-2022-q2-report.pdf
[/URL]
If this is real information, I would think the yield on the 10-year Treasury would plummet. It was up yesterday. I would understand stocks falling on news like this although it could be better news on the inflation front, but it seem to have been mostly ignored by the news. I don't get it, I guess. This sounds like front page stuff to me.
The dollar was flat yesterday as it remains below the 200-day EMA for another day and that's 5 closes below it despite the recent snap back rally.
If money managers want to help their end of year reports they better start to make a move soon. They have likely spent the last week dumping their portfolio losers so they are not in their reports as holdings, but they could start buying up stocks that haven been doing well lately, or even do some bottom fishing from stocks they thought were too expensive earlier in the year. Most of the tax selling should be close to over although it could go into the end of this week, but everything else adds up to why we should expect some kind of relief soon.
The DWCPF (S-fund) has been leading on the downside and this is likely because of the projected slowdown in the economy when growth stocks tend to lag. It's closing in on the lower half of a recent trading range and at this point it is bounce, or test the lows.
The EFA / I-fund was down but once again it is more stable than the US funds. There are some very clear open gaps below that you would think have to get filled at some point, but it doesn't have to happen yet. Doing that during the normal Santa Claus rally period would be very sneaky of the Wall Street bandits. There's some support in the 64.70 - 65.50 area.
BND (Bonds / F-fund) was down again and the breakdown from some support late last week was a warning sign, apparently. If that jobs data headline I mentioned above turns out to be true and ever gets fully reported, we could see this rally quickly.
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
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much for reading. Happy Hanukkah to those of you celebrating! 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.
Santa Claus is supposed to show up soon, but he must be stuck in traffic somewhere. If you see him in your rearview mirror, can you nudge over and give him some room? Officially he has until the 21st or so before the seasonality bullish bias really kicks in.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD]
[/TD]
[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 (C-fund) was down almost 1% yesterday, and while we did see some buying in the final hour, we have seen the index close off its lows for 5 days in a row but it hasn't helped. Trading volume started to dry up as we'd expect to happen after an options expiration and during the holidays. The open gap from that CPI rally in November was finally filled yesterday, although arguably that gap was really started at the November 9th closing price near 3750. How low will they take this before a bounce? Probably low enough to try to get folks to say uncle, and sell. Then the Santa Claus rally will kick in. Nerves are getting frayed and the fear is getting palpable.
I can't help but feel that bigger traders and money managers are able to push us smaller guys around. We often get knocked out of losing trades, only for it to move back in our favor after we've sold. There's reasons for that including that they can see our limit and stop orders out there like sitting ducks, and of course they are just better at this and know how to push us around.
So, every year, even though I know it is supposed to happen, I feel like they might take advantage of all of us traders who are waiting for a Santa Claus rally, and in a way they do, but not totally. We have seen a lot of sell offs in recent years before Christmas and this may be their effort to get some buyers to back off, but it seems like they are never able to fully avoid a rally at some point in the final two weeks of December, no matter how poorly the market is doing. Of course they are usually the ones doing the heavy buying once they've scared everyone else out, which triggers the rally, then the herd eventually follows.
I've posted some of these before but here are some prior years, including the terrible December of 2018, the bear market years of 2008, 2001, and 2000. Without exception, there's a decent rally a some point in the final two weeks in December. Of course now that I'm pounding the table it probably won't happen - we know how that goes. 8^\
Here's one for you. I saw someone posted this information from the Philadelphia Federal Reserve showing an extraordinary distortion of what we have been told. I really don't see anyone else talking about it so maybe I am misunderstanding what I am seeing, or they are trying to hide it from us.
Do you know how the market reacts when the monthly jobs report get released on the first Friday of every month? Well what if we found out that what they were releasing all of those months was complete misinformation?
Here's the headline:
Job Gains This Year Overstated by 1.1 Million, Philadelphia Fed Reveals
"In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.
"Payroll jobs in the nation remained essentially flat from March through June 2022 after adjusting for QCEW data:"
https://freerepublic.com/focus/f-bloggers/4117423/posts
[url]https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/benchmark-revisions/early-benchmark-2022-q2-report.pdf
[/URL]
If this is real information, I would think the yield on the 10-year Treasury would plummet. It was up yesterday. I would understand stocks falling on news like this although it could be better news on the inflation front, but it seem to have been mostly ignored by the news. I don't get it, I guess. This sounds like front page stuff to me.
The dollar was flat yesterday as it remains below the 200-day EMA for another day and that's 5 closes below it despite the recent snap back rally.
If money managers want to help their end of year reports they better start to make a move soon. They have likely spent the last week dumping their portfolio losers so they are not in their reports as holdings, but they could start buying up stocks that haven been doing well lately, or even do some bottom fishing from stocks they thought were too expensive earlier in the year. Most of the tax selling should be close to over although it could go into the end of this week, but everything else adds up to why we should expect some kind of relief soon.
The DWCPF (S-fund) has been leading on the downside and this is likely because of the projected slowdown in the economy when growth stocks tend to lag. It's closing in on the lower half of a recent trading range and at this point it is bounce, or test the lows.
The EFA / I-fund was down but once again it is more stable than the US funds. There are some very clear open gaps below that you would think have to get filled at some point, but it doesn't have to happen yet. Doing that during the normal Santa Claus rally period would be very sneaky of the Wall Street bandits. There's some support in the 64.70 - 65.50 area.
BND (Bonds / F-fund) was down again and the breakdown from some support late last week was a warning sign, apparently. If that jobs data headline I mentioned above turns out to be true and ever gets fully reported, we could see this rally quickly.
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
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much for reading. Happy Hanukkah to those of you celebrating! 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.
