Streak ends at 1 again
by, 04-19-2017 at 01:22 AM (420 Views)
Stocks opened lower yesterday and couldn't catch much of a bid all day, although the Dow did manage to close about 60-points off the intraday low. The 114-point loss means we still have not had two consecutive positive days in April. And if we go further back, the Dow has had only one two-day winning streak since 12-day winning streak ended in February, and that was back in early March.
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Goldman Sachs fell nearly 5% on the day after a disappointing earnings report and that accounted for 70 of the 114-point loss in the Dow.
On the bright side, the small cap index Russell 2000, which was not as impacted by investment bank's earnings, managed to close with a small gain and our S-fund was basically flat. The tech heavy Nasdaq was also spared as it only lost 0.12%, but after the close yesterday IBM disappointed and was falling sharply after hours so that could put some more pressure on the Dow and the Nasdaq today.
Earnings are a test of what has already been priced in and expectations were pretty high going into earnings season so missing, or even meeting estimates, doesn't help the situation.
The SPY (S&P 500 / C-fund) tested and held at the 50-day EMA, but remains in a downtrend since the March 1 peak. Technically, it hasn't broken down yet but the bulls are certainly keeping their distance. They are in need of a catalyst like a resolution in the Far East or perhaps something more concrete on tax reform will do. One thing they don't want is disappointing earnings reports..
The DWCPF (S-fund) closed flat on the day, which is obviously good relative strength compared to the large caps and international stocks. But it closed below the 50-day EMA for a 4th straight day and also remains in a downtrend.
The Dow Transportation Index gave back half of Monday's gains and is now threatening to create a bear flag.
The EFA (I-fund) closed well off its lows and remains above the 50-day EMA but below the rising channel.
The three largest markets in the I-fund are Germany, London, and Japan. Germany and Japan have pulled back to areas that could provide strong support...
Japan fell through the 50-day EMA in March and is now looking to the 200-day EMA for support.
On the other hand, London was hit hard on Tuesday and fell through key support and this could be a problem since the next level of support is well below the current price.
The AGG (Bonds / F-fund) rallied on more selling in stocks and this time it basically filled that open gap created after the election. It took 5-months, but it's done. Now, can it continue higher, or was that the target?
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