tsptalk's Market Talk

[tsptalk]

After Friday's negative reversal, seeing some downside early Monday morning isn't a surprise, but with the Fed on the verge of its next interest rate cut (we suspect) I don't think the bears will get too aggressive. Maybe after the Fed decision on rates, etc. However, I have often been surprised at some of the moves that we have seen before a Fed meeting or a big jobs report, so you never know.

Rumors, positioning, profit taking or speculation can cause a little more volatility than you'd expect leading up to a big news day.

Yields are up sharply, breaking above key resistance on the 10-year T-note.




Small caps are leading this morning, but they are well off the earlier highs after another smack-down off the double / triple top. This is typical action, and we'll see how much push the bears have at this level. Will we see a more defined right shoulder forms before a breakout?




Gold, oil and bitcoin are all down this morning with the dollar and yields rallying.

 

[tsptalk]

It's a slow morning on day one of the Fed's two day meeting. Stocks are up slightly while yields are flat.

Small caps have a slight advantage but strength in the dollar has the I fund's ACWX down a bit.

Gold and bitcoin are up, and oil is down.

The odds of a rate cut tomorrow are high, but at this point it's all about the Fed's outlook going forward.

 

[tsptalk]

Another quiet morning with three hours to go before the Fed decision on interest rates, although tech stocks are getting hit this morning.

The Dow is up triple digits and the Nasdaq is down triple digits with Microsoft down nearly 3%, while the S&P 500 and small caps are fairly flat.

Rate cut probability is at 90% this morning, but most are expecting a "hawkish cut" and that means it could get bought - either way. Sell the rumor buy the news? Just a guess. And what happens if they surprise us with dovish spin?

 

[tsptalk]

Bonds post rate cut:

 

[tsptalk]

The impact of Oracle's disappointing earnings report after the bell last night is being felt today in the indices. Large tech stocks are dragging the Nasdaq and S&P lower this morning but the counter force of the Fed's new dovish outlook is trying to keep the indices from completely rolling over, while small caps are holding up well.

So far the S&P 500 has only retraced yesterday's candlestick and trying to hold there to potentially keep this shallow right shoulder of the inverted head and shoulders pattern from breaking down.




Yields and the dollar are helping as both are down this morning. The dollar has really broken its chart and I'm a little surprised that it took this long knowing rates were coming down, and quantitative easing was ending this month.




Gold is up, oil and bitcoin are surprisingly down, given the weakness in the dollar.

 

[tsptalk]

Equal Weight S&P 500:

 

[tsptalk]

Stocks opened higher on Monday, but as is often the case, the opening gap tried, and succeeded, to get filled, and particularly when the prior day was a negative day. We are seeing some stabilization near Friday's lows and those levels holding are key, but we also see right shoulders forming in inverted head and shoulders patterns, so some back and forth churning is possible.



Despite the decline in yields, small caps are lagging, but the decline in the dollar is helping the I-fund (ACWX) hold onto a solid morning gain, although it too is off its early highs.

Bonds and the dollar are down so the bulls have some wind at their backs, and of course December seasonality will eventually favor the bulls as we get through the mid-month lull when tax loss selling is common.

I'm not reading too much into the decline this morning, but there are some key levels that must hold to keep the bullish outlook alive.

We'll get some key jobs data tomorrow morning.

 

[tsptalk]

The futures were down sharply overnight as Asian markets were getting hit, but when the opening bell rang things had stabilized. But as is often the case, the cash market matched the overnight futures and we have a pullback this morning as the S&P 500 tests its 30 day average again, and investors are searching for a turnaround Tuesday.

The jobs report showed a loss in October and a modest gain n November. This pulled down yields and the dollar, but today they are not helping the indices as they look for support. The I-fund is taking the largest hit, despite a decline in the dollar.

 

[tsptalk]

The I-fund is taking the largest hit, despite a decline in the dollar.

Ah, ha! It looks like ACWX had paid a dividend, and the chart hadn't updated this morning, but it has been fixed now.

It's still lagging, but it's not down 2% as the morning chart suggested.

 

[tsptalk]

After a modestly lower open, stocks just took a turn for the worse as the S&P 500 is racing down toward yesterday's lows.



You can see in the chart that the 50-day EMA is being tested again.

I'm not seeing any specific reason, but it looks like tech and the semiconductors are getting hit the hardest.

With everyone expecting a late December rally, the market will take its sweet time, and perhaps push out some of the less confident bulls with this morning's sell off.

There are two weeks of trading left in December, a month that has so far lived down to its mid-month expectations. Can the latter part of the month live up to its seasonality calendar?


source: sentimentrader.com

Yields are flat and the dollar is up slightly. Small caps have given up a decent early gain. Bitcoin us up modestly, as is gold and oil.

 

[tsptalk]

Good start this morning, but more work to be done. We had a couple of good economic reports including a cooler than expected inflation report. I could have sworn the November CPI was going to be delayed until January, but maybe that was the PPI.



Stocks were due for some relief and the right shoulder of the inverted head and shoulders pattern was nearing a do or die level.

It's a little too early to trust since the S&P has only retraced yesterday's losses so far, but it's a start and must hold.

Micron's earnings are helping tech to try to recover some of its recent weakness. The $SOX semi's index is up over 3%.

The better than expected inflation data is sending yields and the dollar lower this morning, which could help the more aggressive S and I TSP funds.



Bitcoin is up, oil is up, and gold is down this morning.

 

[tsptalk]

Expiration Friday is starting out on the bulls' side with stock rallying out of the gate. We've seen early gains fade in recent days.

It looks like a productive low being formed after a successful test of the 50-day average, but like we saw in the left shoulder of this inverted head and shoulders pattern, it's not always straight up to new highs, although that failure in November turned out to be the head of the inv. H&S.



The I-fund has had some issues with double tops, and it looks like it is about to test the previous highs again. That is also an inverted head and shoulders, and they tend to breakout, but we have to go back to September to see the previous breakout that lasted more than a day or two. The good news, triple and quadruple tops don't hold as easily as double tops.

 

[tsptalk]

Stocks start the week with a decent rally. Small caps are leading and the I-fund is lagging, although there's something going on with the dollar that I haven't figured out yet.

Both StockCharts.com and Yahoo have UUP falling to 27 this morning. They don't mention a dividend or any reason why that is happening.



Yahoo's main quote does mention that the Previous Close is 27.14, and you can see that is not the case, so some kind of dividend must have been paid.

I can't imagine it is a real decline in UUP as the I-fund would be doing much better than a 0.36% gain. Instead it is lagging the S&P 500 today, although making a new high at the moment.



The S-fund's DWCPF is making another run at the October highs, after a failed breakout a week or so ago.

Keep the news down, keep congress quiet, and keep the trading volume down, and stocks could do just fine into the holidays.

 

[tsptalk]

Yup, a dividend was paid. The chart has been updated on stockcharts:

Both StockCharts.com and Yahoo have UUP falling to 27 this morning. They don't mention a dividend or any reason why that is happening.

View attachment 71244

Yahoo's main quote does mention that the Previous Close is 27.14, and you can see that is not the case, so some kind of dividend must have been paid.

 

[tsptalk]

Stocks are chopping near break even as the positive momentum meets the previous highs, and a GDP report that was perhaps too high and may shut the door on a rate cut in January.

GDP-Adv. For: Q3
Actual: 4.3%
B.com Forecast: 3.3%
B.com Cons: 3.0%
Prior: 3.8%

This is rear-view mirror data from the 3rd quarter, and a little bloated looking in that is was way above estimates, but it is what it is and yields are popping while stocks don't seem to know exactly what to do yet this morning. Small caps are lagging on the higher yields. Was this why the small caps faded late yesterday?



The I-fund is up making new highs. I'm a little surprised that the dollar is down this morning, but then again, the dollar often moves counter to how I believe it will react to economic data. The UUP chart broke out last week, but it reversed back into the descending channel this week, which is helping the I-fund lead in early trading today.




Oil and gold are flat, bitcoin is down, and stocks are now gaining a little momentum as the holiday trading week is doing its thing.

 

[tsptalk]

Good morning! This is starting out as a nice holiday trading day with quiet, mostly bullish action so far. The Nasdaq and small caps are lagging a bit.

We have yields and the dollar fairly stable, no major surprises in economic data, and light trading volume, which is good unless some kind of news headline comes out that can move the market. Lightly traded markets can move quickly.

Today officially kicks off the Santa Claus rally period, which this year goes from Dec 24 through Jan 5. (Last 5 and first 2 trading days of the year.)

From CNBC: "According to LPL Financial chief technical strategist Adam Turnquist, the S&P 500 has averaged a 1.3% return during the Santa Claus rally period, with positive results occurring 78% of the time. The market’s typical seven-day average return is just 0.3% with a positivity rate of 58%, meanwhile, he wrote in a note to clients."

The markets close at 1 PM ET today and of course will be closed tomorrow. The TSP is open and taking transactions normally today, but they are closed tomorrow.

Merry Christmas!

 

[tsptalk]

 

[tsptalk]

Today is hallmark holiday trading being the day after Christmas, yet a Friday before the weekend. It "should" have a bullish bias but so far it has been more choppy and flat this morning.

Not the worst action in the world but perhaps surprisingly heavy as early rallies faded, and small caps are lagging.

There's a long way to go today and trading volume will be very light, so it could be whippy.

Any positive close today on the S&P 500 would be a new record.

Gold and silver are up big with silver jumping another 6% to near $76/oz. Oil and bitcoin are down.