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More Hindenburg Omen Warnings

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Stocks were mixed on Tuesday with the major indices again splitting between gains and losses on the day. The Dow lost 102-points or 0.36%, but a 5% decline in Home Depot accounted for about 90 of those 102 points lost. The Nasdaq and small caps had a good day while the S&P 500 was basically flat, and the Transports posted a modest loss.

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A check of the Hindenburg Omen status still shows an unusual high percentage of new 52-week lows versus new highs on both the NYSE Exchange (96 new lows versus 122 new highs) and the Nasdaq (120 new lows versus 167 new highs) despite the market indices near all time highs. This suggests internal weakness and generally a warning sign. There have been several of Hindenburg Omen signals on the Nasdaq in recent days, but yesterday triggered the first one the NYSE since August.

The price of oil is at an interesting pivot point after breaking below a rising support line slightly yesterday, as well as the 50-day EMA. Investors are certainly going to be watching this since the direction correlation between oil and the S&P 500 has been quite apparent.




Bond yields are in sync with the price of oil as both are decent measures of economic strength hence the bond market also looks to be at a crucial point as you'll see in the charts below.



The S&P 500 (C-fund) was flat yesterday as it spent a second day digesting Friday's gains. There seems to be a pattern of one big day up followed by several days of sideways movement, but be careful. It's tough find a bear on TV lately and that means investors are getting complacent, and you know what that could mean...




Back in early 2018 we has a similar narrow rising trading channel, and similar levels of bullishness when all felt great in the world. Until it wasn't, and what a difference a few days can make as three months of gains were erased in a few days, so be careful.




The S-fund popped its head above the July highs and backed off a bit, but still had a solid day of returns. 1460 could provide some short-term resistance but it could also turn out to be a little more than that as we have seen what double tops can do in the short-term. It would be a healthy move if this stalled for a while and let the 50-day EMA catch up a bit, but this is small cap season and the bulls may not let that happen.




The EFA (I-fund) was down yesterday after an early gain was erased. The dollar rallied after it successfully tested the 50-day EMA support, putting some pressure on the I-fund, but...




... is that a bear flag getting ready to breakdown on dollar chart? We seem to have a lot of charts in this same situation - trading just above the 50-day EMA and testing rising support.




The yield on the 10-year Treasury tested the lower end of a rising trading channel, which could arguably be a bear flag, and the 50-day EMA.




This of course is meaningful to our F-fund as the AGG appears to be in a bull flag and at a make or break level. Whichever way the chart above breaks, I'd expect the chart below to do the opposite.




Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php

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

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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