It was a strong day for stocks on Friday as the Federal Reserve Chairman Jerome Powell was singing a dovish song for the economy at the Fed's annual symposium in Jackson Hole. The Dow gained 133-points, or 0.52% on the day, with the broader indices performing even better.
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We have been in the midst of a chaotic political environment, a weak seasonal period for stocks, and a trade battle with China that many anticipate could negatively impact the economy, but stocks continue to rally and climb that wall of worry.
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[TD] It's that time of year again... time for the annual Last Man Standing NFL Contest. It's free.
More Information: Last Man Standing Contest
http://www.tsptalk.com/mb/site-news-and-announcements/30639-last-man-standing-2018-a.html
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Last week would have been pretty early to be a pre-holiday reversal but as you'll see in some of the charts down below, we did see several longer-term trends break by the end of last week.
Here's another reminder of the seasonality surrounding Labor Day Weekend. The data is old (1950 - 2011) but it is 62 year's worth. Today would be day # -5.
Chart provided courtesy of www.sentimentrader.com
Our TSP Talk Plus premium service System has been way too conservative over the last few weeks as it did not anticipate this month's strength in stocks, but both our Intrepid Timer and RevShark services have been all over timing this market this summer with some great calls recently, making their subscribers very happy, I assume. I have to give them two props because I just did not see this August rally coming.
The S&P 500 / C-fund made a new high on Friday but it still closed right on the January highs so I'm not sure if the double top pullback happened yet. We did see a pullback earlier this month but it had not quite yet hit those January highs back them. The question going forward of course is whether we are still due for a double top pullback, or is this market just too strong right now?
The small caps (S-fund) have been making new highs and has been leading on the upside, but it too continues to hold near the longer-term resistance line, although that line is rising.
The Dow Transportation Index reversed course after a brief pop into new high territory last week. I'm still watching 11,200 area as a key support line should the pullback resume this week.
The EAFE (I-fund) is a hostage of the dollar and again its recent relief rally has come on the back of a dip in the dollar. There is some resistance near 67.50 with that resistance coming off that strange spike in early June, but if the dollar moves down this week that resistance will likely be history.
The dollar saw a minor breakdown from the longer-term rising trading channel (red) but remains within the blue trading channel. I would say if the dollar falls below 25.0 that the I-fund will come out of its funk, but there is strong support on this dollar chart above 25.0 which, if it holds, would likely mean the relief rally is over for the I-fund, so this is a key week for the dollar and the I-fund.
And the dollar breaking its longer-term rising trend (red) has created a bunch of trend breaking action in other charts. I have been wondering whether this is one of those pre-holiday temporary reversals from the major trends that will reverse back after the holiday, but last week was a little early for a pre-holiday reversal. You can see these trends breaking in the commodity charts...
Copper...
Oil...
Gold...
And even the 10-year Treasury Yield...
The VIX was down again on Friday but that 11.50 - 12.00 area held yet again, so despite new all-time highs, investors weren't getting too complacent, at least compared to the level we saw earlier this month.
The AGG (bonds) made a new high but the F-fund was given a small loss on Friday by the TSP. This chart looks good as far as moving above resistance but it has been going up for three straight weeks since that fake-out breakdown from the late July bear flag. Is it due for break?
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
[TABLE="align: center"]
[TR]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[TD]
[/TD]
[TD="align: center"]
[/TR]
[/TABLE]
We have been in the midst of a chaotic political environment, a weak seasonal period for stocks, and a trade battle with China that many anticipate could negatively impact the economy, but stocks continue to rally and climb that wall of worry.
[TABLE="width: 600, align: center"]
[TR]
[TD] It's that time of year again... time for the annual Last Man Standing NFL Contest. It's free.
More Information: Last Man Standing Contest
http://www.tsptalk.com/mb/site-news-and-announcements/30639-last-man-standing-2018-a.html
[/TD]
[/TR]
[/TABLE]
Last week would have been pretty early to be a pre-holiday reversal but as you'll see in some of the charts down below, we did see several longer-term trends break by the end of last week.
Here's another reminder of the seasonality surrounding Labor Day Weekend. The data is old (1950 - 2011) but it is 62 year's worth. Today would be day # -5.
Chart provided courtesy of www.sentimentrader.com
Our TSP Talk Plus premium service System has been way too conservative over the last few weeks as it did not anticipate this month's strength in stocks, but both our Intrepid Timer and RevShark services have been all over timing this market this summer with some great calls recently, making their subscribers very happy, I assume. I have to give them two props because I just did not see this August rally coming.
The S&P 500 / C-fund made a new high on Friday but it still closed right on the January highs so I'm not sure if the double top pullback happened yet. We did see a pullback earlier this month but it had not quite yet hit those January highs back them. The question going forward of course is whether we are still due for a double top pullback, or is this market just too strong right now?
The small caps (S-fund) have been making new highs and has been leading on the upside, but it too continues to hold near the longer-term resistance line, although that line is rising.
The Dow Transportation Index reversed course after a brief pop into new high territory last week. I'm still watching 11,200 area as a key support line should the pullback resume this week.
The EAFE (I-fund) is a hostage of the dollar and again its recent relief rally has come on the back of a dip in the dollar. There is some resistance near 67.50 with that resistance coming off that strange spike in early June, but if the dollar moves down this week that resistance will likely be history.
The dollar saw a minor breakdown from the longer-term rising trading channel (red) but remains within the blue trading channel. I would say if the dollar falls below 25.0 that the I-fund will come out of its funk, but there is strong support on this dollar chart above 25.0 which, if it holds, would likely mean the relief rally is over for the I-fund, so this is a key week for the dollar and the I-fund.
And the dollar breaking its longer-term rising trend (red) has created a bunch of trend breaking action in other charts. I have been wondering whether this is one of those pre-holiday temporary reversals from the major trends that will reverse back after the holiday, but last week was a little early for a pre-holiday reversal. You can see these trends breaking in the commodity charts...
Copper...
Oil...
Gold...
And even the 10-year Treasury Yield...
The VIX was down again on Friday but that 11.50 - 12.00 area held yet again, so despite new all-time highs, investors weren't getting too complacent, at least compared to the level we saw earlier this month.
The AGG (bonds) made a new high but the F-fund was given a small loss on Friday by the TSP. This chart looks good as far as moving above resistance but it has been going up for three straight weeks since that fake-out breakdown from the late July bear flag. Is it due for break?
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
