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| Today's Commentary (Short Term Outlook) |
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Does China matter? Stocks opened the day deep in the red Monday after the Chinese Shanghai Composite ended Monday's trading (Sunday night here) down almost 7% on the day. At least that was the excuse. The C, S and I funds dropped 0.80%, 1.26% and 0.54% respectively. The F fund gained 0.26%. The S&P 500 is showing signs of withering, but there is some short-term support out there, and yesterday's sell-off did bounce off of it. The smaller rising wedge within the larger rising wedge is holding so far, but rising wedges don't usually break to the upside so there is some reason for concern. Still, the S&P 500 is in a solid uptrend and in a bull market, buying after a two or three day pullback is not a bad play. In a bull market, you give the nod to the potential bullish outcome until it tells us otherwise.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk This week has a decent positive historical bias, particularly Wednesday and Friday, but after the holiday - not so much. The dollar remains in its downtrend and is mainly responsible for the I-fund out performing the C and S funds. The faster moving averages are below the slower EMA's and it is still closer to resistance than support. For this reason, the I-fund should continue to outperform the C and S funds, whether stocks are moving up or down.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds (F-fund) are still doing pretty well as
bond yields are having trouble moving higher. Many thought yields
would continue higher but we've had a recent break of the uptrend of the
10-year T-Note yield. It is still holding above the 200-day EMA, but
the 20-day EMA just went below the 50-day EMA, and yields are starting to
look bearish - which is bullish for bonds and the F-fund. Very
surprising. |
