tsptalk's Market Talk

[tsptalk]

Dow closes above 40,000.

 

[weatherweenie]

Dow closes above 40,000. 辰

Glad to hear that the economy is doing great!

 

[tsptalk]

Stocks start this post options expiration week on the upside again. After holding near flat both Thursday and Friday, I talked about a bigger move on Monday. My guess was that we'd see some kind of reversal lower early this week, but clearly not yet. We have the set up for some pressure on stocks with yields and the dollar up again, although the 10-year is still below resistance and it may take a move above 4.45% to trigger the bulls.

The S&P is near the previous highs and the top of its narrow channel so it may need a boost to go further than the 5322 area it is near now.

Small caps are up but they fell below their channel, but that angle of incline wasn't very sustainable.

We have oil, gold, silver, bitcoin Japan and Europe all up. With those gains across the board you would think the dollar is tumbling, but it's actually up while high yield corp. bonds are down. Something doesn't feel right.:scratchchin:

 

[tsptalk]

The indices feel a little tired but so far no sign of giving up from the bulls. Even the 10-year yield is opening the door for stocks with a move lower and what could be the end of its rebound after filling in a gap and failing at the 50-day EMA.

Things could change but the economic calendar is quiet so there's not a lot of catalysts.

Small caps and I-fund are lagging in early trading. The dollar is is up a few ticks adding some pressure.

Asia and Europe are red. Gold, silver, and oil are down. Copper has been on a tear, and bit coin is flirting with new highs.

Here's one headline slowing slowing down the market this morning...

Fed Gov. Waller wants ‘several months’ of good inflation data before lowering rates

 

[JTH]

Ah I'm getting bored here, there isn't enough price action to warrant my participation and I've already had my daily allocation of naps.

Perhaps there's some consolidation ahead of us?

Transports hitting the skids today, 17 of 20 down intraday, 12 of 20 more than -1%

 

[tsptalk]

Not good. That's a breakdown.

 

[tsptalk]

Stocks can't get any traction this morning with yields and the dollar up, but once again the bears are doing little take advantage.

Everyone is waiting for Nvidia to report after the bell, and being that there are not a lot of catalysts out there right now, it's kind of ridiculous to put the weight of the market on one stock, but that what feels like is happening.

High Yield Corporate Bonds are down and possibly breaking down, but it may just be looking to fill in that gap before moving up any further.

More red in Asian markets last night, and also in Europe and with the dollar up this morning, that has the I-fund down sharply. Gold and oil are down this morning, and bitcoin is up.

 

[tsptalk]

Stocks gapped up this morning on Nvidia's earnings, but that gap has filled already after bond yields spiked and it looks like it corresponds with the release of this Global manufacturing PMI number, which was well above last month.

The 10-year yields spiked. The dollar is down but it came well off its lows.

Could be a blip but to take a way a monster gap up that easily is interesting. Stocks could go right back up now that the gap is filled, but if yields stay up it could get messy.

Nvidia obviously stole the show once again beating already elevated expectations.

Gold and bitcoin are down, oil is up. Japan was up big last night and Europe is mixed this morning.

 

[tsptalk]

Stocks gapped up this morning on Nvidia's earnings, but that gap has filled already after bond yields spiked and it looks like it corresponds with the release of this Global manufacturing PMI number, which was well above last month.

 

[tsptalk]

A relief bounce this morning looks familiar. The last negative outside reversal (NOR) day saw a 3-day attempt to rally back and retrace some of the losses of the April NOR to the highs before it rolled over again. It is a pre-holiday day and trading may be light but my guess is that money managers are watching closely, even if they are off early to their holiday weekend destination.

Yields and the dollar are down retracing yesterday's gains but the charts have broken through resistance and we may have a new trend.

Gold and silver are rallying. Oil is up, and bitcoin is flat.

There's lots of red in the overseas markets but the weakness in the dollar is helping the EFA (I-fund) to a big gain. I never understood how it could matter so much.

Japan -1.17%
Hang Seng (Hong Kong) - 1.38%
German DAX - 0.41%
London FTSE -0.21%
France -0.27%

UUP dollar -0.21%
EFA / I-fund +0.67%

Does this make sense? A 0.21% loss in the dollar wipes out all overseas index losses and gives the EAFE Index a big gain?

 

[tsptalk]

Stock futures were higher when the opening bell rang for this new, post-holiday week of trading. It's already gotten a little choppy and out there after Thursday's big negative reversal day and Friday rebound, and a few days of back and forth has been typical.

It happened in April and also in July of 2023, as I showed in today's commentary. The outcome of these large negative outside reversal days are fairly consistent, but of course nothing works the same every time so we can only watch and see.

One thing that is also fairly consistent is trying to retrace the losses of that reversal day, even if it going to turn down again. The small caps have already done this as we can see in the Russell 2000 ETF, IWM.

Yields are up but the dollar gapped down this morning, although it is bouncing back at at the highs of the day.

It may take another day or two before trading volume picks up as vacationers slowly get back from their long weekend.

Oil. gold, and silver are up. Bitcoin is down.

 

[tsptalk]

The bond market opens an hour before the stock market and you can see that the 10-year yield is already up to start the day, and the longer-term chart below reminds us that the trend is still up. That is putting pressure on the stock futures before the opening bell this morning.

 

[tsptalk]

The indices are trying to come back to fill the open gaps created this morning, but it's too early to say what this will mean - a fill and flop, a fill and recovery, or no fill.

Bottom line, the negative outside reversal day from last Thursday is still acting typically.

Not only are yields up sharply (see prior post) but the dollar is also popping higher, and that is giving the I-fund fits this morning.

 

[tsptalk]

Salesforce is the 7th heaviest weighted stock in the Dow, which is why the Dow, down 333 just after the opening bell, will likely lag the broader indices today.

The technical picture looks rough, but yields and the dollar opened lower on weaker than expected jobs data (jobless claims were up), and that might give the stock market some relief if it holds. The futures came well off their overnight lows. The lower yields are a relief to the small caps, which are actually up to start the day.

The overseas markets are mixed with Japan down 1.3% last night but Europe is green with the dollar down sharply.

Oil is down, gold is flat and bitcoin is up.

 

[tsptalk]

Stocks opened higher after the PCE Prices inflation report this morning, which was basically inline with estimates, but the relief wore off and we have seen some backing and filling of the open gap. It's early and things could flip around again but it may be a little disheartening for the bulls to see stocks down with yields and the dollar opening the door to a bullish catalyst.

Small caps are leading, at least the Russell 2000, as falling yields are giving investors an excuse to continue to rotate from the inflated large cap tech sector into the smaller companies that may have been left behind. Whether this is a temporary trend based on the 2-day pullback in yields remains to be seen.

It's the last trading day in May and the last morning to use a May IFT as after noon ET any transaction becomes one of your June moves.

Oil, gold, silver, and bitcoin are all down despite the weakness in the dollar.

Japan was up big last night and Europe is mixed although leaning positive.

 

[JTH]

Small caps are leading, at least the Russell 2000, as falling yields are giving investors an excuse to continue to rotate from the inflated large cap tech sector into the smaller companies that may have been left behind. Whether this is a temporary trend based on the 2-day pullback in yields remains to be seen.

I love me some pain, the timing at the end of May makes for great headlines going into the weekend. Did May close up 3% or did May drop -3% off the top?

 

[tsptalk]

 

[coolhand]

hhhmmm...wonder why NAAIM remains bullish?

 

[nasa1974]

My feelings exactly. Who's pulling the levers behind the curtain?

 

[tsptalk]

Interesting morning. Yields are dropping again, most likely because of that PMI reading and the PCE data, but you would think the small caps would be jumping on this move.

Well, they were when the market opened, but that PMI reading is troubling (as I talked about in today's commentary) and there is a line between yields falling because inflation is easing, and yields falling because the economy is suffering. So small caps have turned negative after a strong positive open.