Stocks opened lower on Thursday, and with the Fed on the afternoon agenda, there wasn't a whole lot of movement until the FOMC meeting completed and the policy statement was released. That's when the bulls stepped up. By the close the Dow had gained 189-points, and the Nasdaq, which had been lagging badly with a loss over 1% in early traded, ended the day with a moderate gain of 0.40%. Bonds and the dollar were down, and that helped the I-fund to a healthy gain yesterday.
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The Fed remained quite dovish and told the market what it wanted to ear. Interest rates will remain near 0% through 2023. The central bank’s stated goal is to keep inflation at 2% over the long run, and they will let inflation run hotter than usual to ensure a full economic recovery. Fed Chair Jerome Powell said that the Fed would need to see a sustained move in inflation above 2% before considering changes to its current policy stance.
They upgraded their economic outlook and expect the GDP to grow 6.5% in 2021 before cooling off in later years.
Stocks reversed direction after the announcement and the Dow and S&P 500 settled at new all time closing highs, so it was quite a day. The Russell 2000 led on the upside although it is still slightly off its highs.
Advancing issues and advancing volume both beat out decliners by about 2 to 1, and there was about a 10 to 1 ratio of new highs to new lows on the NYSE.
It may seem like a green light for anyone to jump in stocks, and the investing environment sure does look favorable, but we can't always trust an emotional move after a Fed meeting like that. Stocks were threatening to pullback before the meeting and we'll just have to see in the coming days if that pullback resumes after the Fed excitement dissipates.
Just a reminder that after today (the 18th) seasonality becomes more of breeze in the face of stocks, rather than at their backs where it was in the first half of the month.
Chart provided courtesy of www.sentimentrader.com
I have some friends coming from out of town for March Madness so I may not be available much for the rest of the week. I'll check my emails occasionally during the day and I will keep an eye on the market and post a quick version of the daily commentary for Friday. Hopefully things will remain quiet. I will post any IFT alerts for premium members, as that is always a priority.
Speaking of the premium services; have you seen how well Intrepid Timer's System is doing this year? AutoTracker
And speaking of March Madness. If you're interested in joining our free NCAA bracket contest, please GO HERE for more information: The deadline is whenever they tip off the first games on Friday. Yahoo! Tourney Pick'em.
The S&P 500 (C-fund) created a decent positive reversal day yesterday, and the Fed can have that impact on the indices, but sometimes the Fed euphoria wears off in a day or two. The index closed at a new high and the chart looks fine, but as we've talked about earlier in the week, there is a chance of some sideways consolidation after that explosive 7-day rally.
The DWCPF (small caps / S-fund) was down sharply in early trading yesterday, hit the 20-day EMA and one of the rising support lines, and bounced. This looks pretty interesting here as we could be seeing the right shoulder of an inverted head and shoulders pattern forming.
The Volatility Index closed below 19 again and some think this is showing too much complacency. If we compare it to the readings we've seen since the COVID crash, then yes. That's true. But in 2017 - 2019 it spent most of its time below 20, and even below 15.
BND (bonds / F-fund) was down slightly but had to come back from deeper losses when the yield on the 10-year Treasury nearly hit 1.7% yesterday, before settling back down near 1.64%. That could be a negative reversal on the TNX, but that also looks like a bullish flag. There is an open gap near 1.55% and if it can get that low, look for a short-term rally in bonds and the F-fund.
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. 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.
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The Fed remained quite dovish and told the market what it wanted to ear. Interest rates will remain near 0% through 2023. The central bank’s stated goal is to keep inflation at 2% over the long run, and they will let inflation run hotter than usual to ensure a full economic recovery. Fed Chair Jerome Powell said that the Fed would need to see a sustained move in inflation above 2% before considering changes to its current policy stance.
They upgraded their economic outlook and expect the GDP to grow 6.5% in 2021 before cooling off in later years.
Stocks reversed direction after the announcement and the Dow and S&P 500 settled at new all time closing highs, so it was quite a day. The Russell 2000 led on the upside although it is still slightly off its highs.
Advancing issues and advancing volume both beat out decliners by about 2 to 1, and there was about a 10 to 1 ratio of new highs to new lows on the NYSE.
It may seem like a green light for anyone to jump in stocks, and the investing environment sure does look favorable, but we can't always trust an emotional move after a Fed meeting like that. Stocks were threatening to pullback before the meeting and we'll just have to see in the coming days if that pullback resumes after the Fed excitement dissipates.
Just a reminder that after today (the 18th) seasonality becomes more of breeze in the face of stocks, rather than at their backs where it was in the first half of the month.
Chart provided courtesy of www.sentimentrader.com
I have some friends coming from out of town for March Madness so I may not be available much for the rest of the week. I'll check my emails occasionally during the day and I will keep an eye on the market and post a quick version of the daily commentary for Friday. Hopefully things will remain quiet. I will post any IFT alerts for premium members, as that is always a priority.
Speaking of the premium services; have you seen how well Intrepid Timer's System is doing this year? AutoTracker
And speaking of March Madness. If you're interested in joining our free NCAA bracket contest, please GO HERE for more information: The deadline is whenever they tip off the first games on Friday. Yahoo! Tourney Pick'em.
The S&P 500 (C-fund) created a decent positive reversal day yesterday, and the Fed can have that impact on the indices, but sometimes the Fed euphoria wears off in a day or two. The index closed at a new high and the chart looks fine, but as we've talked about earlier in the week, there is a chance of some sideways consolidation after that explosive 7-day rally.
The DWCPF (small caps / S-fund) was down sharply in early trading yesterday, hit the 20-day EMA and one of the rising support lines, and bounced. This looks pretty interesting here as we could be seeing the right shoulder of an inverted head and shoulders pattern forming.
The Volatility Index closed below 19 again and some think this is showing too much complacency. If we compare it to the readings we've seen since the COVID crash, then yes. That's true. But in 2017 - 2019 it spent most of its time below 20, and even below 15.
BND (bonds / F-fund) was down slightly but had to come back from deeper losses when the yield on the 10-year Treasury nearly hit 1.7% yesterday, before settling back down near 1.64%. That could be a negative reversal on the TNX, but that also looks like a bullish flag. There is an open gap near 1.55% and if it can get that low, look for a short-term rally in bonds and the F-fund.
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. 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.
