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Coolhand's Market Analysis

EFA Madness

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Last week, I said I was leaning bullish for the week on solid breadth and liquidity readings. I also noted that NAAIM was bullish, which is bullish for the market in general.

But it was a tough week for those of us in the S fund as that index closed just 0.04% higher. And it took a big Friday rally just to get back to even. The C fund fared better with a 0.66% gain, but it was the I fund (EFA) that really stood out as it tacked on a cool 2.57% gain. I really don't know how long that fund can power higher as it's looking pretty extended and it's overbought.

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The S&P 500 is very close to tagging its intraday high from over 2 months ago. I can't help but think that the powers that be plan to rally this index beyond that line of resistance sooner or later.

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The DWCPF bounced off a key Fib level on Thursday, which was highly suggestive of a bottom. Friday helped confirm a bottom as price continued the move to the upside with a nice gain, but still well off its highs from a little over a week ago.

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The EFA is really stretching it out. Momentum is almost vertical and RSI is quite overbought. I don't know where this is going, but maybe the French election tops it out? That's just a guess and maybe not a good one.

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The Bank Index is toying with its 50 dma the past 2 trading days, but closed under it on Friday. We'll have to see if it can decisively push higher over the next few days. Generally speaking, if banks don't do well, the market often doesn't do well either. But these are odd times, so we'll see how it goes.

For next week, I am still bullish. NAAIM remains bullish and the options smart money is bullish for Monday, so I'm looking for some upside follow through at least Monday. Our TSP Talk survey has been bulled up a bit for 3 weeks running, but it's not as predictive as it once was, though that may change somewhere down the road. My intermediate term system is still positive. Breadth and liquidity both turned back up late last week are remain in the bullish column.

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Updated 05-07-2017 at 04:48 AM by coolhand

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S&P500 (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes