Stocks came back from some morning losses on Friday, but off the afternoon highs, to close near the flat line. The Dow lost 11-points on the day and that closed out a fairly flat week for the large caps, while small caps lagged with a 0.73% loss on the week. The Nasdaq opened sharply higher after Amazon's earnings report, but that early gain was completely wiped out.
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Some may have been disappointed that stocks couldn't rally on Friday after the 10-Year Treasury Yield slid further back below the 3% level we have been focused on, but the two-day bounce in the S&P 500 did erase the losses from earlier in the week while yields dipped.
You can see on this daily chart that the current pullback on the 10-year yield will hit some support near 2.95%, but there is a decent sized open gap near 2.87%.
Thanks to one of our readers who pointed this out to me, there is an open gap on the weekly 10-year yield chart all the way down near 2.68% from back in January, so that's a potential pullback target, and I think if that is filled it would surprise a lot of people, but any kind of slowdown in economic data would make that possible.
A strong earnings season has kept the indices afloat despite some negative looking charts so the battle between fundamentals and technicals is being won by the fundies so far, but the charts are not out of the woods yet. The S&P 500 and small caps are below their 50-day EMA's and that's always a slightly negative.
The April Jobs Report comes out on Friday and estimates are looking for a gain of 190,000 jobs and an unemployment rate of 4.0%.
A two-day FOMC Meeting starts Tuesday but no press conference is schedule, nor is there an expected rate hike, but certainly possible clues to future action.
The S&P 500 / C-fund found support again at the 200-day EMA last week. It posted a decent positive reversal day on Friday but it ran into some resistance in the form of the 50-day EMA and the bottom of the old bear flag. 2685 looks to be another tough level should it move above the 50-day EMA early this week.
The weekly chart shows some positive signs with a positive reversal weekly bar last week, which held at the long-term rising support line again, and at the 50-week EMA.
The small caps / S-fund posted a small loss on Friday which moved it back to close below the 50-day EMA. Also, that could be a small bear flag we're seeing so it looks lie a battle between that bearish formation and a potential positive higher low formation.
The Dow Transportation Index has been stuck in a range since early February and its near the middle of the range right now. There may be a bull flag formed (blue) but an argument could be made that there is also a small bear flag (red) in there as well.
The price of copper took a dive on Friday and it's back testing the 200-day EMA and remains in a longer-term downtrend. For those who use this chart as a gauge for economic strength, this may be a concern. But for those who are concerned about interest rates rising, any economic weakness could halt those rates from moving higher, so this can be viewed as the glass half full, or half empty.
I want to keep an on on this chart of the Chinese Shanghai Index as it continues to flirt with a potential breakdown. As I've said before, this isn't making any headlines yet, but that could change if it does breakdown.
The AGG (Bonds / F-fund) popped back above the February lows and the support line. There is an open gap near 106.50 that may garner attention, and as I mentioned above, the question is whether the economy is slowing or strengthening right now because we are seeing evidence on both sides. Right now the trend is still down for bonds.
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.
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Some may have been disappointed that stocks couldn't rally on Friday after the 10-Year Treasury Yield slid further back below the 3% level we have been focused on, but the two-day bounce in the S&P 500 did erase the losses from earlier in the week while yields dipped.
You can see on this daily chart that the current pullback on the 10-year yield will hit some support near 2.95%, but there is a decent sized open gap near 2.87%.
Thanks to one of our readers who pointed this out to me, there is an open gap on the weekly 10-year yield chart all the way down near 2.68% from back in January, so that's a potential pullback target, and I think if that is filled it would surprise a lot of people, but any kind of slowdown in economic data would make that possible.
A strong earnings season has kept the indices afloat despite some negative looking charts so the battle between fundamentals and technicals is being won by the fundies so far, but the charts are not out of the woods yet. The S&P 500 and small caps are below their 50-day EMA's and that's always a slightly negative.
The April Jobs Report comes out on Friday and estimates are looking for a gain of 190,000 jobs and an unemployment rate of 4.0%.
A two-day FOMC Meeting starts Tuesday but no press conference is schedule, nor is there an expected rate hike, but certainly possible clues to future action.
The S&P 500 / C-fund found support again at the 200-day EMA last week. It posted a decent positive reversal day on Friday but it ran into some resistance in the form of the 50-day EMA and the bottom of the old bear flag. 2685 looks to be another tough level should it move above the 50-day EMA early this week.
The weekly chart shows some positive signs with a positive reversal weekly bar last week, which held at the long-term rising support line again, and at the 50-week EMA.
The small caps / S-fund posted a small loss on Friday which moved it back to close below the 50-day EMA. Also, that could be a small bear flag we're seeing so it looks lie a battle between that bearish formation and a potential positive higher low formation.
The Dow Transportation Index has been stuck in a range since early February and its near the middle of the range right now. There may be a bull flag formed (blue) but an argument could be made that there is also a small bear flag (red) in there as well.
The price of copper took a dive on Friday and it's back testing the 200-day EMA and remains in a longer-term downtrend. For those who use this chart as a gauge for economic strength, this may be a concern. But for those who are concerned about interest rates rising, any economic weakness could halt those rates from moving higher, so this can be viewed as the glass half full, or half empty.
I want to keep an on on this chart of the Chinese Shanghai Index as it continues to flirt with a potential breakdown. As I've said before, this isn't making any headlines yet, but that could change if it does breakdown.
The AGG (Bonds / F-fund) popped back above the February lows and the support line. There is an open gap near 106.50 that may garner attention, and as I mentioned above, the question is whether the economy is slowing or strengthening right now because we are seeing evidence on both sides. Right now the trend is still down for bonds.
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.
