That was a heck of a start to the new year. The final tally didn't reflect the movement that we saw, but from the time the futures opened up higher on Monday evening, to the opening bell gains that disappeared into the afternoon lows, and finally a rally into the close, it was quite a day. The question is, did it tell us anything? One thing it did tell us is that, barring any major rally today, the Santa Claus rally never did make an appearance at all this year as the S&P 500 was down the week before Christmas, the week after Christmas, and now the first day of the last two days of the official Santa Claus rally period which ends after today. It's extremely rare to have all three of those occur.
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I don't have a whole lot to say today and I told you why yesterday since the first few days of a new year can be telling for the entire year - so far not so good - but it doesn't generally say much for the rest of the month. After the first two or three days of a new year a trend will begin, but it's not always in the same direction as those first few days.
The volatility yesterday actually started on Monday evening. The S&P 500 futures gapped up 34-points, hit a peak of +46 points in the wee hours of the morning - which was more than a 1% gain, but it started to tank after the opening bell and made a low of being down 46 points before closing down just 16. A bad day but it was all over the place and it didn't really tell us much.
The Yield on the 10-Year Treasury was down sharply early but bounced back some after filling in a gap. That helped stocks open higher, but as yields battled back, stocks fell lower during the day.
The dollar was up and that put pressure on the market from the start. It moved above the 200-day EMA and a shorter term resistance line (red) but found resistance at that orange 200-day simple moving average. It looks like it wants to go higher but again the first trading day of the year may or may not be just a smoke screen.
There are certainly enough negatives out there, and maybe too many to name them all, but the inverted 2/10 year yield curve is one, but the other obvious headwind is what is happening to Apple's stock. The old "as goes Apple, so goes the market" does not look good with the trend clearly being down and another sharp decline yesterday.
Another day or so to get through, I believe, before we see which way this market wants to go. Everything is pointing toward the negative, and investors / pundits are as bearish as we've seen in a while so while the caution flags are certainly waving, don't forget that it is very rare indeed, when everyone is right.
Once again, in case you missed it, congratulations to all our AutoTracker winners! There were some impressive returns during the 2022 bear market. Here's a link to the list of winners: https://www.tsptalk.com/mb/autotracker-monthly-contest/40080-2022-final-autotracker-winners.html
2023 Guess the Dow Contest anyone? More
felixthecat from our forum won the 2022 version by guessing 33,872, which was 725 points off the close last Friday of 33,147.
The S&P 500 (C-fund) was all over the place yesterday, as I described above, and now it is in between some key levels of support, which can be considered those blue boxes which are old open gaps, and resistance above in the form of the 50-day EMA and that 3900 area that we have mentioned several times in recent months. It continues to be in play.
The DWCPF (S-fund) was the laggard to start the New Year just as it lagged most of last year.
The EFA / I-fund led with a gain as European markets were up in the morning and were closed as the U.S. indices started to fade. It did manage to get back above the 20-day EMA by a penny yesterday, and there is still an open gap above that may be at least a short-term upside target. The sideways action is creating some kind of elongated bearish looking flag so it is hanging onto those moving averages to keep the bear flag from breaking down.
BND / F-fund had a breakout of sorts, although the weakness later on turned it into a negative reversal looking day but it is now back above the descending resistance line, the rising support line, and the 50-day EMA, so maybe it's time for the F-fund to make a move?
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much 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.
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I don't have a whole lot to say today and I told you why yesterday since the first few days of a new year can be telling for the entire year - so far not so good - but it doesn't generally say much for the rest of the month. After the first two or three days of a new year a trend will begin, but it's not always in the same direction as those first few days.
The volatility yesterday actually started on Monday evening. The S&P 500 futures gapped up 34-points, hit a peak of +46 points in the wee hours of the morning - which was more than a 1% gain, but it started to tank after the opening bell and made a low of being down 46 points before closing down just 16. A bad day but it was all over the place and it didn't really tell us much.
The Yield on the 10-Year Treasury was down sharply early but bounced back some after filling in a gap. That helped stocks open higher, but as yields battled back, stocks fell lower during the day.
The dollar was up and that put pressure on the market from the start. It moved above the 200-day EMA and a shorter term resistance line (red) but found resistance at that orange 200-day simple moving average. It looks like it wants to go higher but again the first trading day of the year may or may not be just a smoke screen.
There are certainly enough negatives out there, and maybe too many to name them all, but the inverted 2/10 year yield curve is one, but the other obvious headwind is what is happening to Apple's stock. The old "as goes Apple, so goes the market" does not look good with the trend clearly being down and another sharp decline yesterday.
Another day or so to get through, I believe, before we see which way this market wants to go. Everything is pointing toward the negative, and investors / pundits are as bearish as we've seen in a while so while the caution flags are certainly waving, don't forget that it is very rare indeed, when everyone is right.
Once again, in case you missed it, congratulations to all our AutoTracker winners! There were some impressive returns during the 2022 bear market. Here's a link to the list of winners: https://www.tsptalk.com/mb/autotracker-monthly-contest/40080-2022-final-autotracker-winners.html
2023 Guess the Dow Contest anyone? More
felixthecat from our forum won the 2022 version by guessing 33,872, which was 725 points off the close last Friday of 33,147.
The S&P 500 (C-fund) was all over the place yesterday, as I described above, and now it is in between some key levels of support, which can be considered those blue boxes which are old open gaps, and resistance above in the form of the 50-day EMA and that 3900 area that we have mentioned several times in recent months. It continues to be in play.
The DWCPF (S-fund) was the laggard to start the New Year just as it lagged most of last year.
The EFA / I-fund led with a gain as European markets were up in the morning and were closed as the U.S. indices started to fade. It did manage to get back above the 20-day EMA by a penny yesterday, and there is still an open gap above that may be at least a short-term upside target. The sideways action is creating some kind of elongated bearish looking flag so it is hanging onto those moving averages to keep the bear flag from breaking down.
BND / F-fund had a breakout of sorts, although the weakness later on turned it into a negative reversal looking day but it is now back above the descending resistance line, the rising support line, and the 50-day EMA, so maybe it's time for the F-fund to make a move?
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks so much 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.
