If you believe in market manipulation, then look no further than Monday's action. It did not look like it was going to be the 13th straight positive close for the S&P 500, but a late rally pushed just enough to close up 34 cents. The results were mixed with the Dow down and the Nasdaq up impressively considering the rest of the market, and the internal market breadth saw a lot more stocks down yesterday, than up. Bond yields and the dollar keep pushing to the upside keeping the pressure on the stock market.
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The S&P 500 (C-fund) had a streak of 12 straight positive Mondays and with about an hour to go in the trading day it looked like it was not going to be a lucky 13. But it was. Whether this was a legit positive reversal or some kind of market manipulation, I'll let you make the call, but we should know after today based on whether Tuesday follows through on the upside or not.
Markets don't usually reverse on Mondays as they tend to more often follow through on the prior week's action. It's Turnaround Tuesdays that are more known for being a reversal day. Not always, of course, so we'll see.
Yesterday saw some sharp losses in the more interest rate sensitive small caps, and the dollar sensitive I-fund, but it was the 200-day EMA that held again on the S&P 500 (C-fund), and that may be the hope some bullish technicians are counting on.
The Nasdaq outperformed despite the jump in yields, and while consensus is that tech is also sensitive to higher yields, this chart looks a lot better than some of the others. We don't have a TSP Nasdaq fund, but it's one of the market leaders and if it can hold up, the rest of the market will take notice.
The 10-year Treasury Yield hit a new high and is touching the 2007 levels despite concern about economic weakness and some coolness in the inflation front based on the PCE report. If the economy is going to cool, and the Fed is satisfied with the PCE report that they follow closely, you would think that this next chart could be getting a little too high, but there are some people smarter than me that think otherwise.
Dollar is still flying high and the trading channel has been holding firmly. If this turns down, the market could easily turn up, but it's tough to predict a reversal in a trend.
"October is the month for bottoms", says Art Cashen, although the first part of the month can be quite volatile. He also warned about the 4.7% level on the 10-year being a warning sign and yesterday's high was 4.703%.
Stocks are actually holding up better than I might expect given the 10-year yield getting closer to 5%, but if Cashen is right, it may be close to the tipping point.
Oil was down sharply on economic strength concerns, and maybe finally because of the strength in the dollar. Gold and silver were down sharply as well making me think it's the dollar this time. The trend is still up in oil, but that's three pretty good sized declines in a row as it fell below $89.
I made a bad call trying to use my last September IFT on Friday, when waiting and using an October IFT would have saved me some money - at least yesterday. Dang those limits!
We get the September Jobs Report and estimates are looking for a gain of about 150,000 jobs. That would be below Augusts' number but still not recessionary by any means. The unemployment rate is expected to drop to 3.7%.
Admin Note: Free Trial this week! Get the daily Last Look Report sent to you FREE! - No obligation
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Here's the top performing accounts in the AutoTracker for September. Congratulations to the winners! You've got to be in it, to win it.
DWCPF (S-fund) was clobbered yesterday as it retested last week's lows and it is actually at a very important pivot point between yesterday's low, and the bottom of the open gap on the second chart below.
The two charts above are not the best looking charts but it would benefit greatly if the S&P 500 can hold at its 200-day EMA, which is being tested now.
The EFA (I-fund) fell under the pressure of another big rally in the dollar yesterday. It fell below some support, and that's always troubling. But yesterday's comeback in the S&P 500 could mean at least an attempt to do some buying in the overseas markets today, which were all closed when the S&P 500 was rallying during the final hour of trading yesterday.
BND (bonds / F-fund) broke down again and I am running out or words to describe how troubling this decline in bonds is. Like the I-fund above, a new low was made yesterday and it is now looking for some support from the top or bottom of the huge open from back in November of last year.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
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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[TD="width: 338, align: center"] Daily TSP Funds Return
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The S&P 500 (C-fund) had a streak of 12 straight positive Mondays and with about an hour to go in the trading day it looked like it was not going to be a lucky 13. But it was. Whether this was a legit positive reversal or some kind of market manipulation, I'll let you make the call, but we should know after today based on whether Tuesday follows through on the upside or not.
Markets don't usually reverse on Mondays as they tend to more often follow through on the prior week's action. It's Turnaround Tuesdays that are more known for being a reversal day. Not always, of course, so we'll see.
Yesterday saw some sharp losses in the more interest rate sensitive small caps, and the dollar sensitive I-fund, but it was the 200-day EMA that held again on the S&P 500 (C-fund), and that may be the hope some bullish technicians are counting on.
The Nasdaq outperformed despite the jump in yields, and while consensus is that tech is also sensitive to higher yields, this chart looks a lot better than some of the others. We don't have a TSP Nasdaq fund, but it's one of the market leaders and if it can hold up, the rest of the market will take notice.
The 10-year Treasury Yield hit a new high and is touching the 2007 levels despite concern about economic weakness and some coolness in the inflation front based on the PCE report. If the economy is going to cool, and the Fed is satisfied with the PCE report that they follow closely, you would think that this next chart could be getting a little too high, but there are some people smarter than me that think otherwise.
Dollar is still flying high and the trading channel has been holding firmly. If this turns down, the market could easily turn up, but it's tough to predict a reversal in a trend.
"October is the month for bottoms", says Art Cashen, although the first part of the month can be quite volatile. He also warned about the 4.7% level on the 10-year being a warning sign and yesterday's high was 4.703%.
Stocks are actually holding up better than I might expect given the 10-year yield getting closer to 5%, but if Cashen is right, it may be close to the tipping point.
Oil was down sharply on economic strength concerns, and maybe finally because of the strength in the dollar. Gold and silver were down sharply as well making me think it's the dollar this time. The trend is still up in oil, but that's three pretty good sized declines in a row as it fell below $89.
I made a bad call trying to use my last September IFT on Friday, when waiting and using an October IFT would have saved me some money - at least yesterday. Dang those limits!
We get the September Jobs Report and estimates are looking for a gain of about 150,000 jobs. That would be below Augusts' number but still not recessionary by any means. The unemployment rate is expected to drop to 3.7%.
Admin Note: Free Trial this week! Get the daily Last Look Report sent to you FREE! - No obligation
More info about The Last Look Report
Here's the top performing accounts in the AutoTracker for September. Congratulations to the winners! You've got to be in it, to win it.
DWCPF (S-fund) was clobbered yesterday as it retested last week's lows and it is actually at a very important pivot point between yesterday's low, and the bottom of the open gap on the second chart below.
The two charts above are not the best looking charts but it would benefit greatly if the S&P 500 can hold at its 200-day EMA, which is being tested now.
The EFA (I-fund) fell under the pressure of another big rally in the dollar yesterday. It fell below some support, and that's always troubling. But yesterday's comeback in the S&P 500 could mean at least an attempt to do some buying in the overseas markets today, which were all closed when the S&P 500 was rallying during the final hour of trading yesterday.
BND (bonds / F-fund) broke down again and I am running out or words to describe how troubling this decline in bonds is. Like the I-fund above, a new low was made yesterday and it is now looking for some support from the top or bottom of the huge open from back in November of last year.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
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.
