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tsptalk's Market Talk
- Thread starter tsptalk
- Start date
JTH
Well-known member
The 3-day weekend snuck up on me before I could post anything, it looks to me that the 4 days (post MKL) are historically below the 21-year daily average. Perhaps folks want to take a breather over the long weekend.
A modest bounce in the dollar and yields put pressure on stocks at the open, but all have reversed a bit. The Dow is taking a hit with Goldman Sachs down 5% after reporting earnings.
The post MLK holiday has a negative bias and there is some early January gains for profit takers to grab.
High Yield Corp. Bonds are down slightly but still near multi-month highs.
The post MLK holiday has a negative bias and there is some early January gains for profit takers to grab.
High Yield Corp. Bonds are down slightly but still near multi-month highs.
Some favorable economic data this morning sent stocks rallying at the open, but by favorable we mean weak (not inflationary) so the market is deciphering it. Retail sales and the Producer wholesale prices were both weaker than expected.
This sent the dollar and bond yields to new lows (bond prices / F-fund higher) and stocks have given back some early gains as the indices still show fatigue after the two week rally to start the year.
This sent the dollar and bond yields to new lows (bond prices / F-fund higher) and stocks have given back some early gains as the indices still show fatigue after the two week rally to start the year.
The yield on the 10-year is up and above one layer of resistance, but it looks like there was some unfinished business in the 3.5% area, but that gap has not been filled.
Yields could rise if the US does have a debt issue, but so far there's been little reaction
Yields could rise if the US does have a debt issue, but so far there's been little reaction
It's difficult to find a Wall Street pundit who isn't bearish, and when everyone is leaning one way, we know that the market likes to punish them.
They may eventually be correct, and there's certainly reasons to be concerned about stocks, but it looks Mr. Market is going to try to pull in more on the bullish side before it unleashes any fury.
Yields and the dollar are up this morning, making this morning's rally that much more curious, or maybe impressive is the word?
They may eventually be correct, and there's certainly reasons to be concerned about stocks, but it looks Mr. Market is going to try to pull in more on the bullish side before it unleashes any fury.
Yields and the dollar are up this morning, making this morning's rally that much more curious, or maybe impressive is the word?
The Transportation Index is leading on the upside, which is a bullish sign, but it is once again flirting with the neckline of the inverted head and shoulders pattern so there is work to be done. It could breakout or flip over and refill the right shoulder as it did the left shoulder.
Small caps look quite similar so I would assume a similar outcome.
Small caps look quite similar so I would assume a similar outcome.
An early pop higher in yields and the dollar shook stocks up at the open, but the 10-year yield is now down slightly, and the dollar settled down as well, although still up.
This is such an interesting pattern on the dollar UUP chart where the 26.70 has been tested daily, but failed like a brick wall for almost two weeks.
And the S&P 500 has been doing the opposite:
This is such an interesting pattern on the dollar UUP chart where the 26.70 has been tested daily, but failed like a brick wall for almost two weeks.
And the S&P 500 has been doing the opposite:
As I mentioned in today's commentary Microsoft initially rallied after hours last night after reported earnings, but since I wrote that the gave poor guidance for the year in their post earnings conference call.
That changed everything and now the market is a little more aware of the economic roadblocks we may be facing. The dollar and bond yields (bonds prices up) are down on this development.
It's a down day after failing at more resistance for several indices. So, as we feared was possible, the right shoulders on many of these head and shoulders patterns may need more backing and filling like the left shoulder. The S-fund chart may be the best example but the Transports are very similar.
That changed everything and now the market is a little more aware of the economic roadblocks we may be facing. The dollar and bond yields (bonds prices up) are down on this development.
It's a down day after failing at more resistance for several indices. So, as we feared was possible, the right shoulders on many of these head and shoulders patterns may need more backing and filling like the left shoulder. The S-fund chart may be the best example but the Transports are very similar.
I have mixed feelings about the action. This poor guidance from Microsoft could be the shot heard 'round the world about economic expectations, but the charts are indecisive right now. A close near the lows today would tell us a lot - not everything since we do have some bullish formations in those inverted head and shoulders patterns and a right shoulder formation may need more time, but it would be another failure at resistance.
A strong close would tell us that the market may have priced in the slowdown caused by the Fed's rate hikes, which they have made no bones about, so the market has had plenty of time to adapt to that hawkishness. So the selling could be a knee-jerk reaction with dip buyers waiting in the wings.
The S&P 500 is still holding above the 200-day simple moving average but it fell back below the 200-day EMA. If it can move up and close a 3rd day above it (it's about 5 points below it right now), that would be a good sign.
A strong close would tell us that the market may have priced in the slowdown caused by the Fed's rate hikes, which they have made no bones about, so the market has had plenty of time to adapt to that hawkishness. So the selling could be a knee-jerk reaction with dip buyers waiting in the wings.
The S&P 500 is still holding above the 200-day simple moving average but it fell back below the 200-day EMA. If it can move up and close a 3rd day above it (it's about 5 points below it right now), that would be a good sign.
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