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Stocks are mostly flat after a weak open this morning. Yields and the dollar are down helping take the pressure off of equities. Momentum is n the bulls' side and the bears just don't have the same case as they had a week or two ago. The schedule is light for the rest of the month so there's no major catalysts, except for Nvidia earnings, which will come out after the bell on August 28, and there is a lot lot trading between now and then.

The VIX is currently trading just below 15, and having touched 65 just 9 trading days ago, tells you how dramatic this turnaround rally has been.

We are seeing some bullishness in the the sentiment type surveys but the CNN Fear / Greed Index is still deeply in the Fear Zone, for some reason. That could mean there is plenty of skepticism out there and perhaps plenty of money on the sidelines to continue to fuel the rally. But has it gone too far, too fast?
 
Notice anything weird about the last five closing prices of the S&P 500?

Only 3's, 4's, and 5's? Any numerologists out there want to interpret that, or is this clear proof that there is a deep state running the stock market? :laugh:

tsp-081624z.gif
 
tsptalk said:
Notice anything weird about the last five closing prices of the S&P 500?

Only 3's, 4's, and 5's? Any numerologists out there want to interpret that, or is this clear proof that there is a deep state running the stock market? :laugh:
Click to expand...

Add today to the streak. Creepy.

tsp-081624b.gif
 
A quiet fairly bullish start to the week as the indices are mostly positive on Monday morning. It's a slow economic news week and that tends to favor the bulls, but the week will end with Powell speaking in Jackson Hole. Seasonality is an issue going forward, but being an election year, the numbers are not quite as bad.

Yields and the dollar are down early, helping the bullish case.

The indices are really stretched to the upside and running into more resistance, although that wasn't a problem last week as the chart cut through resistance rather easily. Why stocks are recovering from the July / Aug sell off so easily, I don't know. There have been some favorable economic data reports, but certainly no positive pattern yet with the most recent monthly jobs report being troubling.

Interest rates are likely coming down next month, but we still have 5 weeks before the FOMC meeting, so we are going into month 9 or 10 where the market has anticipated rate cuts, but we still have not gotten one. That means they've been getting priced in all year.

Oil and gold are down slightly, while silver is up. Bitcoin is down after rallying over the weekend.
 
Key close is above or below that bearish engulfing candle (blue). A close above it brings in the old gap for a possible revisit, which would of course erase the entire sell off in about 2 weeks? Why? :dunno: I'm making some money but I don't really get why everyone is so excited. Trading volume is low.

tsp-081924a.gif
 
Stocks are mixed and the S&P 500, which has been up for 8 straight days, is flat and trying to keep that winning streak alive, but do we really want it to? A market that goes straight up has little support when trouble hits, so two steps forward, one step back is a more stable rally.

Yields and the dollar are down again as we see more signs of economic concerns (see employment data issues in my previous post.) The good news is, it likely means the Fed can be more aggressive with rate cuts because they may have gotten behind the curve. You would think the Fed knows about this in the labor market before yahoo News reports it.

Oil, Gold, silver, and bitcoin are all up as the weaker dollar helps commodity prices.

tsp-082024a.gif
 
Stocks are shaking off the one day pullback by rallying on Wednesday morning. Small caps lagged yesterday but are leading today as key support in the S-fund index is trying to hold near 2080.

tsp-082124a.gif



We have yields flat to slightly lower again, and the dollar is flat at the moment and the I-fund is OK with that, up about a half of a percent to start the day.

Oil is up a bit, gold and silver are down, and bitcoin is trying to recapture 60K.

Jobless claims tomorrow and Jackson Hole on Friday are the highlights this week, although we we do get the Fed meeting minutes today.
 
tsptalk said:
I talked about this in today's commentary...

Nonfarm payroll growth revised down by 818,000, Labor Department says
Click to expand...

Caution! Conspiracy theory ahead... :poke:

I understand that interest rates were hiked because inflation had gotten out of control, and now inflation has been eased. But the Fed was holding off on cutting rates because he said the labor market was too strong to cut (worried about inflation coming back) so they kept holding off.

Now stocks (and housing) are at or near all time highs and yet they now they are looking to cut? That's rare, and maybe difficult to explain, especially in an election year. And the economy is holding up better than most expected. I know! Let's revise the jobs numbers down big time and use that as an excuse? :33:

But seriously, the bond market has been indicating that rate cuts are needed and coming so the Fed is in a tough spot. I, and many people, wouldn't mind some slightly lower rates, especially if it's the market calling the shots and if it is to avoid economic weakness, which the jobs revisions confirm.
 
Despite weaker than expected jobless claim data (more claims than last week and than expected) yields and the dollar are up, and stocks are down. It almost seems like the data is being ignored and technical analysis is doing its jobs as the stock market rally is stalling here at the prior highs. It could be anticipation of the Jackson Hole speech tomorrow by Fed Chair Powell.

tsp-082224a.gif
 
Jerome Powell just finished a rah, rah speech, and it sounded quite dovish. Because of that the dollar and bond yields are falling as they continue to embrace the September interest rate cuts. Of course the market has been rallying since the October 2023 lows when it started pricing in rate cuts in 2024, and here we are nearly a year later and they still haven't started.

Holding rates steady has helped bring inflation back toward normal levels, but other than some questionable labor market data recently, we haven't seen many signs of the higher rates hurting the economy, but the slow down in the labor market and the inverted yield curve continue to suggest that there could be some economic headwinds still to come.

Whether that shows up before the election or after, we don't know, but they don't usually like to stir things up before an election. Even the rate cut, which could have come earlier but they chose to wait until September, which is getting closer to the election, has a tinge of politics to it, even though this type of this has been done before. I mean they don't often lower interest rates when the stock market is already at an all time high.

Bottom line, the market is rallying today on a very dovish speech from Powell, but the news is something we have known was coming for a long time and the market has rallied all the way up to this point to new all time highs. Can it keep going? Of course it could, but should it?
 
tsptalk said:
Jerome Powell just finished a rah, rah speech, and it sounded quite dovish. Because of that the dollar and bond yields are falling as they continue to embrace the September interest rate cuts. Of course the market has been rallying since the October 2023 lows when it started pricing in rate cuts in 2024, and here we are nearly a year later and they still haven't started.

Holding rates steady has helped bring inflation back toward normal levels, but other than some questionable labor market data recently, we haven't seen many signs of the higher rates hurting the economy, but the slow down in the labor market and the inverted yield curve continue to suggest that there could be some economic headwinds still to come.

Whether that shows up before the election or after, we don't know, but they don't usually like to stir things up before an election. Even the rate cut, which could have come earlier but they chose to wait until September, which is getting closer to the election, has a tinge of politics to it, even though this type of this has been done before. I mean they don't often lower interest rates when the stock market is already at an all time high.

Bottom line, the market is rallying today on a very dovish speech from Powell, but the news is something we have known was coming for a long time and the market has rallied all the way up to this point to new all time highs. Can it keep going? Of course it could, but should it?
Click to expand...

Somebody remind me why I'm not in the S-Fund....
 
The S-fund is on fire today after the Fed's dovish commentary, but retracing that breakdown candlestick was always a potential target once it got above the resistance of the 50-day EMA. It may even test the previous highs, something the S&P 500 (C) and the I-fund have done already. But can it go much further without digesting the recent giant 3-week rally from 1900 to 2150?

tsp-082324a.gif
 
Stocks are mixed to start the week with the Dow and small caps leading. Yields are flat and the dollar is up after Friday's sharp declines.

We have favorable monetary conditions, as well as some technical bullish signs for stocks, but they have come a long way in a short time so I believe all three options are viable. That is, take profits, buy dips, or just hold and hope there is no correction.

I have heard great arguments on both sides of the coin for possible future rallied, or a major correction. Having interest rates cut usually generates a market rally, or at least the news of a rally has that impact, but it is rare to see them lowered when stocks are already at all time highs. We also have the unemployment rate creeping up and that tends to precede, or be the cause of, some kind of economic slowdown, and that's when the Fed typically cuts.

tsp-082624v.gif

Recessions are the grey shaded areas.


They've been talking about this cut since last October / November when we saw signs of inflation easing.

Gold, silver, oil, and bitcoin are up since Friday's close.

Don't forget to sign up for the free NFL Survivor Pool
 
Stocks opened lower but the large cap techs have battled back in some choppy action before tomorrow's earnings from Nvidia and Friday's inflation report (PCE). Small caps are lagging with yields moved higher, which means bonds are also down.

I mentioned the semiconductor sector in today's commentary, and they too are battling back, trying to hold support, after a weak open.

tsp-082724a.gif



Gold, oil, and crypto are mostly lower this morning.
 
Stocks are acting tentatively in front of tonight's Nvidia earnings. Stocks and bonds are mostly flat. The long rally off the early August lows has taken a lot out of the market and the question is whether it needs to retrace some of that gain, or will this sideways consolidation suffice?

This headlines shows the uncertainty in the retail / consumer world...

Shares of Abercrombie & Fitch plunge 15% after CEO warns of ‘increasingly uncertain environment’


Abercrombie & Fitch (ANF) earnings Q2 2024

But consumer confidence came out better than expected yesterday although in another article I posted, Goldman issues warning on how quickly market confidence has recovered from an August stocks slump

The September seasonality has been talked about enough, but there are some pockets of strength before it gets really bad.
 
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