There was a little bit of everything on the menu yesterday. The bulls got a roaring rally to open the day on Tuesday as the Dow was up over 280-points within the first 30 minutes of trading. By 2 PM ET or so the Dow was down 143 points making for a 425 point range on the day. By the close, the Dow was down just 27 and small caps were actually slightly higher. It will be a tough act to follow today.
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The I-fund was up because the European markets held onto some big gains when they closed prior to things completely falling apart in the U.S. indices. The smalls caps were basically flat, but they were part of that wild ride. Bonds were up.
The SPY (S&P 500 / C-fund) traded in a wide range yesterday - testing both sides of a possible pennant formation. It closed below the 50-day EMA for the 2nd day in a row. All the open gaps have been filled, except for one, but it's probably too early to talk about that one.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) also spread its wings yesterday, reaching out to both ends of its wedge formation. The bad news was it couldn't breakout. The good news was, buyers stepped up at the rising support line after the nasty midday sell-off and it closed above the 50-day EMA again.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Transportation Index is the market leader, but what we are seeing right now is not what the bulls want from the leader. The bear flag broke down and now there's just a short-term support line between it and a possible lower low. It has closed below the 50-day EMA for 3 straight days.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) gapped open higher and closed its overhead gap, then came back down by early afternoon and filled the gap it opened when the market opened. And of course the small open gap from last week was closed on Monday so there are no major gaps left open. There are a couple of small ones still open near 62, but the 60.50 area (top of the recent gap) may be resistance in the way of those getting filled any time soon.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) posted a small gain yesterday and closed above the old high for a second straight day. Yields are getting so low that you have to wonder what is going on, but investors are taking those low yields rather than take the risk in stocks. Of course this will change once stocks rebound, but when exactly will that be?
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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