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Rebound comes up short by the close

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The volatility continued Wednesday and as you see in these mini-charts, there was no lack of intraday ups and downs as the market looked for direction. The Dow was down over 200 at one point, and up over 300 so the range remains wide and that can set up decent trading opportunities. Too bad we have to act only once and it has to be 4 hours before the market closes. The Dow ended the day down just 19-points but it lost about 285 points in the final 15 minutes of trading.
Daily TSP Funds Return

The headlines will have their impact but right now emotions and somewhat predictable reactions are dictating direction. For example, the S&P 500 rallied up to the 50-day EMA and backed off rather quickly. That's common once it falls below it. That could be a short-term ceiling and the low on Tuesday "could" be the floor, although there's always a possibility of lower low if this market wants to start a downtrend.


The SPY (S&P 500 / C-fund) opened lower but rallied strongly up to the 50-day EMA before pulling back again. A negative reversal day was created and I would look for more action like this with wide swings during the day while investors digest the recent losses.




The small caps / S-fund bounced sharply off of the 200-day EMA on Tuesday and tried to follow-through on Wednesday but the early gains barely held.




The EAFE Index / I-fund shows a gain here but the dollar was up sharply and some overseas markets are running into resistance. See the German DAX chart below.




The dollar spiked higher, and after filling an open gap (blue) on Tuesday, it may have its sights on the open gap (red) near 23.90. That could put some pressure on the I-fund should it happen, but the UUP is still in a downtrend so we'll see how much more room this rally has.




The German DAX tanked off its highs along with U.S. stocks, but it dropped below its 200-day EMA and the bounce off the lows is now testing that 200-day EMA. That could be trouble if it fails.




The AGG (bonds / F-fund) made a new low on Wednesday. It held at the test of Monday's low but the momentum is on the downside and there would have to be some aggressive investors and traders out there to start buying bonds at this point.




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

Tom Crowley

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

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SPY (C Fund) (delayed)

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

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

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

(Stockcharts.com Real-time)