tsptalk's Market Talk

[FAAM]

Those big "W" patterns on the C & S charts -- can oft continue up for quite a ways (as apposed to the "M" pattern that oft signals more downer-times). I'm thinking of jumping in off the G-fund Lilypad tomorrow morn (?)... or just stay with G for the year at 4+%. Hmmmm...

 

[tsptalk]

Another strong open has failed. Bear flags and resistance on many charts may be giving the bears an edge, but we have seen how this market can be -- what we see in the morning isn't necessarily what we get at the close.

Yields are popping again, and that's not helping, and the dollar is up after yesterday's decline as the tariff talk gets digested.

Oil and gold are up while bitcoin is down sharply this morning.

Busy morning for me with the Annual Subscription Sale getting started.

 

[tsptalk]

The 10 year yield is currently up to 4.72%.

 

[tsptalk]

It's another sloppy day for stocks as the yields remain stubbornly high. The 10-year yield is flat right now after giving back some earlier gains. Perhaps the stock market will find its footing if this reversal can continue, but the trend remains up.



Small caps are lagging badly in early trading, spurred by the early rally in yields, but there's been a little bounce back with the 10-year easing off the highs.

Russell 2000 is flirting with the bottom of the bear flag:




The dollar is up and the I-fund ETF is down. Gold is up, oil is flat, and bitcoin is down this morning.

 

[tsptalk]

Reminder, the stock market and TSP are closed on Thursday.

RIP James Earl Carter

 

[tsptalk]

It's very early in the trading day but the initial reaction to the stronger than expected jobs report is negative as the 10-year yield jumps to another new high.

The F-fund (BND) is below the neckline of the head and shoulders pattern, and the S-fund (DWCPF) has broken down from its bear flag.

Notice above that bonds peaked (and the 10-year yield bottomed) after the prior jobs report on Dec 6.

 

[tsptalk]

More new highs for the dollar and the 10-year yield is holding near its 52-week high as well.

You can't always trust a Monday morning gap in stocks, and the weak opening this morning is already attempting to bounce back to fill the gap. It's a long day of trading and we can only wait and see where it lands at the close, but that closing price will be telling. Will the bulls wait for a turnaround Tuesday?

The indices are oversold and investors are fearful so a rebound is possible, but if these losses hold, the charts will be in the process of breaking down, and the bears may get more aggressive.

The gaps from post election day are now filled on both of these charts. Is that all the bears wanted to do?

 

[tsptalk]

After a cool PPI report, stocks opened higher, chopped around, and making some decent progress so far as the C and S fund charts are trying to reclaim some broken support.

Stocks wanted to rally after Monday's positive reversal day, and now that we had the positive open, the bulls must hold it into the close.



Tomorrow's CPI is the key, for a day anyway, but it could be the game changer.

The 10-year yield is flat this morning. Gold and bitcoin are up while oil is down but coming off a big 2-day, and one month, rally.

 

[tsptalk]

Stocks are showing some resilience after the initial gap up / gap fill. Tomorrow should be a BIG day, and the small caps, which are up big today, may set the tone. The breakdown from the bull flag found support at the 200-day EMA and it has rebounded nicely - but it's heading right for the bottom of the flag again.



The S-fund chart is back in the flag, as shown in my prior post, but this may be more telling since it is a much more followed index than the DWCPF.

 

[tsptalk]

The initial bullish reaction to the CPI report tells me that people were expecting the worst. It was good, not great.

The chances of an interest rate cut by the March meeting went from 24% to 29%.

A cut by the May meeting: 37% to 45%

June meeting: 57% to 69%

July 68% to 74%

There's no certainties and nothing definitive.

So the futures jumping feels more like the market was looking for an excuse to rally, but it wanted to get by the PPI and CPI unscathed first.

Bank earnings were pretty good, and that may be helping.

Of course what it did do is potentially change the short-term course of yields.

 

[tsptalk]

It's a choppy morning for stocks as the various indices digest the big gains created on Wednesday. Yields are down again, helping the small caps lead in the early going.

The bulls have taken back the momentum but the bears' case now includes the lure of the open gap created after Wednesday's CPI triggered opening bell. On the other side there is FOMO from those who did not buy the recent lows and may be compelled to buy any minor dips. This is keeping the indices near even so far today, and perhaps we will get a few days like this before it gets resolved one way or the other.

 

[tsptalk]

Stocks are following through again off of Monday's positive reversal as we head into a three day weekend. Can stocks continue rallying into next week's less favorable seasonal calendar?

The 10-year Yield was down earlier but it battled back to even, so stocks holding up without the aid of a decline in yields is impressive.

Earnings season is getting busier but the big names don't report until the last week in January.

Large caps are leading so far this morning, for a change. Oil and gold are mostly flat while bitcoin is up $4k and back above 100K.

 

[tsptalk]

Stocks came out of the gate running this Tuesday morning led by the small caps. There's already been some backing and filling of the gap created as the indices pullback from the opening highs.

With Trump back in the White House, we can probably expect more headline driven market moves. The headline I saw this morning was that announced tariffs were not as bad as expected.

Yields are down with the 10-year below 4.6%. Gold is up, oil is down, and bitcoin is down today after a positive weekend of trading.

 

[tsptalk]

Netflix is stealing the show this morning, although it did back down after hitting 1000 briefly this morning. Now it's closing the gap, but big tech as a group is up big in sympathy with the Naz (QQQ) up 1.4% this morning. The action is also pushing the S&P 500 up near its all time highs.

The announcement of 10% tariffs on China seems to be a relief, and Jamie Dimon of JPMorgan didn't seem concerned about it saying, "If it’s a little inflationary but it’s good for national security, so be it. I mean, get over it.”

So the market is taking it all in and we're seeing some positive, although mixed results.



Yields and the dollar are up slightly so the small caps are taking a break today after its 4 gap rally off the Jan 13 low. And the I-fund is just north of flat currently.

Gold is up, oil is flat and bitcoin is hovering near 104K.

 

[tsptalk]

The 10-year Treasury Yield is up again after last week's pullback (pre-holiday reversal - trend resumed after the holiday.) This is putting pressure on stocks, particularly small caps, as we see the indices doing some backing and filling after the recent rally.

The Dow is up triple digits but Tech stocks are lagging. The double top in the S&P is still in play.

BlackRock’s Fink sees potential risks and says the bond market will tell us where we are going

Fink said there is a possibility that the 10-year Treasury yield could retest the 5% level and even reach 5.5% if inflation re-accelerates in a meaningful way. If that happens, Fink said it would “shock” the equity market.

https://www.cnbc.com/2025/01/23/blackrocks-fink-says-that-the-bond-market-will-tell-us-where-were-going.html

The I-fund's ACWX is actually up modestly despite a small increase in the dollar.

Gold is down sharply, oil is up, and bitcoin is relatively flat.

 

[tsptalk]

The market is getting blindsided by DeepSeek’s AI technology, which appears to have been built more cheaply than the US companies' versions.

https://www.cnbc.com/2025/01/24/how-chinas-new-ai-model-deepseek-is-threatening-us-dominance.html

Our bull market has been fueled by the potential of the new AI technology and the spending in the tech environment needed for companies to keep up.

Now China is revealing a technology that could threaten that vision.

We'll have to see if this triggers dip buying of the massive open gaps created this morning, or if someone just rang the bell at the stock market peak.

 

[tsptalk]

Part II:

Gaps are opening and getting filled on many charts and the action may turn out to be cleansing - it's too early to say how damaging it really is to US tech companies.

Two open gaps have been filled already on the S&P chart, although there are still others. There's also a new one overhead all the way up near 6100.



Yields are falling and the Dow is down modestly helping the S and I funds weather the tech storm a little better. The right shoulder in the head and shoulders pattern is filled and testing the neckline near 4.5% on the 10-year Treasury.

Smalls caps in the S-fund are already looking to fill this morning's gap, but filling a gap and continuing higher after doing so is not an easy task. We'll see how investors handle it.




The Russell 2000 small caps index has already filled its gap and surprisingly is now positive. Is that a bull flag?

 

[tsptalk]

The Dow Transportation Index is up 1.3% today?

 

[tsptalk]

The Russell 2000 small caps index has already filled its gap and surprisingly is now positive. Is that a bull flag?

So much for that small caps advantage. An odd delayed reaction.

Two gaps are now filled here (blue) and now three area still open - two down, one up.

 

[WorkFE]

two down, one up.

I'll take one up for 1000 Alex