Earnings are coming in strong, but the price of oil is lifting bond yields and the stock market couldn't withstand that pressure yesterday, despite the semiconductors rallying again.  The summer doldrums are here and it doesn't look like earnings are going to help, even though they have been quite good.

Daily TSP Funds Return More returns

86 [of the S&P 500] companies are reporting this week.

Of the 69 companies that have reported so far (14% of the S&P 500):

Overall, 93% are beating estimates, and those that "beat" are beating by a median of 7%.

Of the 7% missing, those are missing by a median of -1%.

             

The S&P 500 (C-fund) continues to look for direction as the long consolidation continued with a low volatility dip yesterday.  It is hitting some resistance near 7540 after recently finding support at 7440.  This looks like a productive flag formation that I would be very optimistic about, except other charts are flailing and looking like they need help quickly, and the question would be whether this can hold up if other charts start breaking.

        


The DWCPF (S-fund) is one of those charts that is struggling.  It is now below the blue support line, and look how easily this chart bounced off that support line in the past.  So far this month that support has failed and now it is floundering below the bottom of the blue channel, and clinging to the 50-day EMA for support.  The bearish looking flag created over the last four days looks concerning, and of course the red head and shoulders pattern could be trouble, although not always, as we talked about yesterday.

          


Here's oil again as it tried to blast through a double dose of resistance.  It did so early yesterday but backed off and closed almost right on the line.  That kangaroo tail reversal could be a reversal day, and I would expect the upside to stall and move sideways to lower in the coming days, barring another major development in Iran.

         

The 10-year Treasury Yield also spiked higher and we're looking a possible double top test in the coming days.  Even if yields go higher, it wouldn't be unusual to see a little pullback here.

The bond market has been pricing in another increase in the probability of an interest rate hike at next week's FOMC meeting.  There's still just a 32% chance, but that tripled what it was last week after those favorable CPI and PPI inflation reports.

   


The Dow Transportation Index is at an interesting juncture where overhead resistance is meeting rising support from below.  It looks like a bullish cup and handle formation so the bulls may have an edge here in this market leader.

           

Commentary views have been down in recent weeks, and that tends to happen during these summer doldrums months.  The market is moving sideways in a less than exciting period for stocks.  That will change eventually, but until then, I may slow my roll for a couple of weeks and perhaps skip a day here and there, or just make things quick, when nothing new is happening.  It's been triple digit hot temps in my neck of the woods for a couple of weeks and with the occasional brown out turning my PC and AC off here and there, I am getting a little burned out, and at my age, I should be on the golf course everyday instead of a hot office.  :)  If the market perks up, I'll be right back on the full time schedule.  This won't impact the premium services.
 

Additional TSP Fund Charts:


ACWX (I-fund) pushed its way above that red descending line but it couldn't hold onto that breakout into the close, where it ended the day flat.  Even a loss in the dollar didn't help keep it green, although the I-fund price may be slightly positive because of the way they come up with the price each day, where late day action isn't always in the price. 

        
 

BND (bonds / F-fund) is failing and it now finds its way below the 200-day average again, with yields on the rise.  Unless you're trying to pick a bottom, this chart looks troublesome, but yields are due for a pause, and that could give BND some kind of a relief rally in the short-term

         

Thanks so much for reading!  We'll see you back here tomorrow.

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