tsptalk's Market Talk

[tsptalk]

Hmmm. Now what? :scratchchin:

 

[JTH]

Hmmm. Now what? :scratchchin:

SPX outside day w/small caps down nearly 2X large caps. Only energy & USD getting a bite, but I don't have my line in the water

 

[tsptalk]

This chart looks like it really wants to break to the upside, but if the hot CPI couldn't push it above the 50-day EMA, what will? The PPI tomorrow?

Of course the bulls would prefer to see this fall back to fill that gap instead.

And it's the 200-day EMA for the 10-year yield. The hot CPI couldn't break it. Interesting.

 

[tsptalk]

Yields (10-year shown) are down again, but how low can they go? This seems to be an area, just below the 200-day EMA, that gets sticky to the upside. Will they finally breakdown?

 

[tsptalk]

 

[tsptalk]

The dollar gaps up and yields move higher, putting pressure on stocks and bonds to start the week. That gap up in UUP is concerning because large open gaps have not been getting filled on this chart in recent months, so this could be a change in character with price pressuring implications.

The 10-year yield is up although still below the 200-day EMA, but like the UUP chart, it's starting with a bull flag below resistance.

 

[tsptalk]

European markets fall as ECB members talk rate cuts at Davos; Hugo Boss down 10%

Those moves come after central bank officials in Europe talked down rate cut expectations.

“It’s too early to declare victory … the job is not yet done. That said, interest rate tightening has been quite successful so far, more successful than we thought even at Davos one year ago,” ECB member Francois Villeroy de Galhau said at the World Economic Forum in Davos, Switzerland.

European markets live updates: stocks, news and Davos latest

The dollar gaps up and yields move higher, putting pressure on stocks and bonds to start the week. That gap up in UUP is concerning because large open gaps have not been getting filled on this chart in recent months, so this could be a change in character with price pressuring implications.

 

[tsptalk]

Yields and the dollar sure are trendy. They just reverse and keep going in that new direction. Suddenly inflation is the concern again, or at least the market has figured out that the Fed isn't going to cut rates 6 times this year.

This new direction is putting pressure on stocks, bonds, oil, gold, almost everything this morning.

I wish the deep state would tell me before they change the game plan. :laugh:

 

[tsptalk]

Yields and the dollar are up again this morning, perhaps on the stronger weekly jobless claims report than expected - fewer jobless claims than expected making for stronger economic data - but stocks are shrugging it off in early trading with decent gains to start the day.

I talked about China and Hong Kong in today's market commentary and I may have misspoke about the Hong Kong situation. Someone asked me about it it in another thread and I wanted to pass it on here in case anyone else wanted to add anything.

Thanks.

You mentioned in today's report that "The Hang Seng market is following China's path, which I suppose makes sense, and while China is not a part of our I-fund, Hong Kong is."

The TSP is supposed to now be following MSCI ACWI IMI ex USA ex China ex Hong Kong Index (USD). This was announced in November.

I haven't found a good symbol that follows that one. There are many MSCI ACWI symbols, and some that exclude US and some that exclude China, but I can't find one that excludes US, China, and HK.

Thanks,
Chris

Interesting. I'm not sure I heard about the Hong Kong exclusion.

According to the tsp.gov website, last updated in December 2022, Hong Kong made up 3% of the I-fund.

I Fund | The Thrift Savings Plan (TSP)

I guess I better look into that change.

Thanks!

 

[tsptalk]

Stocks are mixed in early trading on Friday and the recent strength in the dollar and bond yields is holding back the more aggressive funds, while the Dow, Nasdaq, and S&P 500 are up modestly.

It's been a choppy month, one where if you don't like what you're seeing one week, it may change the next.

The 10-year yields and the dollar are up again this morning, suggesting strength in the economy? The job market has held firm and that may be the driving force as certain sectors thrive (AI driven tech) while others are weakening...

December home sales slump to close out worst year since 1995

December home sales were 6.2% lower than in the same month a year earlier.
Inventory fell 11.5% from November to December, but was up year over year.
Full-year home sales for 2023 came in at 4.09 million units, the lowest tally since 1995.

December home sales slump to close out worst year since 1995

Big tech earnings start coming out next week, and there's an FOMC meeting at the end of the month so there's some upcoming catalysts.

 

[tsptalk]

It was an expiration Friday. Should we trust the rally?

 

[tsptalk]

New highs again in Japan tonight. US stock futures are up modestly. The 10-year yield is down in futures trading.

 

[tsptalk]

Lower yields and a slightly weaker dollar are aiding this morning's rally in stocks - following through on Friday's big rally.

This week we'll get Q4 GDP figures on Thursday and the PCE inflation data on Friday. Both could be impactful, but we'll have three days of trading beforehand.

Oil is up slightly this morning while gold and other precious metals head lower.

Small caps have taken an early lead this morning, which is a positive sign for the broader market if it can hold. IWM and S-fund charts break out of falling wedge / bullish flag pattern.

 

[tsptalk]

Yields and the dollar are up this to start the day this morning while stocks are on the mixed side and feeling a little heavy despite some modest gains in the S&P and small caps.

Small caps are still in catch up mode after their slow start this year, and the I-fund is feeling some heat this morning from another attempt by the dollar to make a higher high.

The Transports are reaching for their previous highs, and United Airlines is up 6% trying to help.

 

[tsptalk]

Stocks are up big after some strong earnings from Netflix. Not usually a big market mover, but there were also some big moves in semiconductors on mixed results out of that sector.

The 10-year yield is down slightly - nothing that would ignite this kind of buying, but the dollar is down sharply, which helps prices in general - particularly the I-fund in our case.

I've been looking for that open gap to get filled which would help this dollar ETF (UUP) create a right shoulder in the inverted H&S pattern.

That has so far resulted in a breakout of one of the bull flags on the I-fund chart that I had mentioned in a commentary earlier this week. The first one was a fake out a couple of weeks ago.

 

[tsptalk]

Yields are down slightly and the dollar is up after a stronger than expected GDP report. Not sure why yields would move lower, but it's helping the F-fund to a nice gain to start the day, and stocks are good with that as well. Small caps are perking up, but the I-fund is feeling the effects of a stronger dollar and is down slightly this morning.

The S&P if off yesterday's highs, but in closing high territory if this morning's gains can hold. The PMO indicator moved above its moving average, which is a bullish sign, but also a sign of overbought in the short-term.

 

[tsptalk]

The Nasdaq 100 is extremely stretched, although on the weekly chart it had no problem getting through the top of the channel.

The problem for the bears is that even when this has hit the top of the daily channel, it can and has just ride up the resistance line. The first part of January was an exception, but that only last a few days. This looks strong and "they" may want to drag in a few more reluctant buyers before pulling the plug on it. Maybe in February? - one of the weaker months of the year historically.

 

[tsptalk]

Stocks are mixed to start the day after the release of the PCE and Personal Spending reports.

Yields are up and the dollar is down and that's causing the mixed action, but also some poor earnings performances after the bell has the Nasdaq lagging. The I-fund took an early lead with the dip in the dollar today.

Since the October lows we have seen a couple of minor pullbacks, but other than that it has been mostly sideways consolidation in lieu of pullbacks. The second short-term chart below of the S&P 500 (C-fund) shows a possible set up for a pullback to the breakout line if the rising wedge pattern fails, but nothing yet.

 

[tsptalk]

Yields are down and the dollar is up so stock are mixed but mostly flat at what appears to be a calm before this week's storm. I don't mean storm in a bad way but rather the wave of news coming out with big tech earnings being released, the FOMC meeting and the Fed's decision on interest rates, plus the January jobs report on Friday.

There is a lot of nervousness out there in front of this week, but the stock charts don't look that bad. It might not take much to change that, but right now... The S&P is quite extended but small caps and the EFA have been basing quite well. Can they hold on if the large caps do pullback after the release of the Magnificent 7 earnings? And of course the earnings might be good, although a "sell the news" reaction could also manifest either way.

Oil is down, gold, silver and bitcoin are up to start the day -- despite the strength in the dollar this morning.

 

[tsptalk]

After an explosive rally on Monday, stocks are more subdued this morning. The bulls have not been shy about buying these early dips recently so we'll see if they are brave enough to do so heading into Microsoft and Alphabet earrings after the bell.

Yields and the dollar are down very slightly so there's not much impact there.

The 2-day Fed meeting starts today but it's not until tomorrow at about 2PM ET that the fireworks will start.

The bulls have been in charge. Will the Fed and / or earnings turn things around? The combo did just that at the end of July and the end of October. In July it turned down. In October it reversed up.