Things are getting more quiet as summer approaches and the lack of headlines is keeping investors at bay for now, jockeying for position in the choppy market. On the S&P 500 chart, as you'll see below, we had a spinning top formation, which is an indecision formation. It can mark a turning point, but with the holiday this coming Monday, trading volume could get light and we know about those pre-holiday reversals, so it could be tough to interpret what is happing over the next 3 to 5 trading days. Stocks in a down trend could go up in pre-holiday trading, only to reverse back after the holiday - and vice versa as well.
It's not so easy to determine the current trend in the S&P 500. It broke below the rising 2019 trend earlier this month, then rallied strongly for a few days, and has since dipped again, falling back below the 50-day EMA. There's a good case that the trend is now down, but with a potential holiday reversal, we could see some unpredictable behavior. But that is a bear flag and those are technically bearish, so good luck to us picking the next short-term move.
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The S&P 500 (C-fund) dipped back below the 50-day EMA with yesterday's
minor loss and that, combined with some descending resistance, gives the bears a
slight edge going forward, but the holiday trading could make a mess of things.
Plus the bears haven't had much will lately to apply pressure. The 50 and
100-day EMA's are battling it out right now so we'll see if the 2860 resistance
level is taken out by the bulls on the upside first, or if the bears can push it
below 2815 to break that next level of support.
The DWCPF (S-fund) lagged with a 0.69% loss yesterday and it again failed at an
attempt to move back above the 50-day EMA. That could be a bear flag that
broke, although it is a little steep. Whatever it is, the bottom of it
held as resistance, and it looks like another test of the 200-day EMA is
The Dow Transportation Index broke sharply lower yesterday and that was enough to push it back below the 200-day EMA. This is a bad looking chart in need of some immediate help.
The EFA (I-fund) also failed at the 50-day EMA so the trend off the highs remains down while the 200-day EMA remains the key support for now. I didn't draw it, but that's a big bear flag in there as well.
I'm going to keep an eye on the economically sensitive commodities since we recently had a weak Citigroup Economic Surprise Index that we talked about the other day. Oil, Copper, Lumber, and even gold (not shown) have all come down recently, with copper and lumber at concerning levels.
The AGG (Bonds / F-fund) rallied as yields fell again. There may have been support at the recent dip's low (blue horizontal), which I hadn't drawn in over the last few days, but I suppose that it a valid support line. The 10-year yields is below this AGG chart and there's a clear bear flag near that double bottom so it's looking more like another leg lower is coming for yields - which would be good for the F-fund.
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