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S&P 500 gives up 3000

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Stocks were down moderately on Wednesday and for the first time in a while the major stock indices closed at their lows of the day. The S&P 500 slipped back below that psychological 3000 level once again after 3 closes above it. The Dow gave up 116-points, and the big loser yesterday was the Transports which fell 3.6%.

Daily TSP Funds Return

After the close yesterday we saw some mixed results in the earnings department with Netflix being the big one, falling a dramatic 12% in after hours trading. That will put a lot of pressure on the Nasdaq particularly today, but decent reports from IBM (up 1% plus after hours) and eBay (up 5.5%) will help to ease some the pressure.

The price of oil was down again, this time on higher than expected inventories gains, and that weighed on the recently surging energy sector. Technically if fell below key support and the 50-day EMA this week, after stalling at the 200-day EMA for a second time this month. Trouble? Maybe.

The weaker seasonality record of the 2nd half of July has already made its presence known. And while we're just a stone's throw away from all-time highs in the big three indices, they had become extended and due for a break.

The S&P 500 (C-fund) fell through that rising wedge pattern that we have been watching. As we have been mentioning, we'd look for any pullback to try to find support at the May 1 high, or the bottom of that open gap (blue.) If buyers don't swoop in at that point, then we'd be looking for a test of the 50-day EMA. Of course the M.O. for this market has been to bounce back after a couple of down days, so we'll see.

The DWCPF (S-fund) fell on Wednesday and is looking for some support at the bottom of that rising support line off the recent lows. That's a rising wedge, which tend to breakdown, and the disappointment in Netflix's earnings may be enough to break that wedge today.

The Dow Transportation Index gave back much of its recent big gains after a weak earnings report from CXS Corp., sending most of the railroad stocks plummeting, as earnings reports for the sector continue to come in mixed.

The I-fund was off slightly but a dip in the dollar helped some. Technically, it closed below that May high so that's a little bit of a red flag.

AGG (Bonds / F-fund) rallied nicely on Wednesday as stocks were falling, and after that mini-double bottom held near 110.65, it looks like it may be heading up to fill that open gap.

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

Tom Crowley

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SPY (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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AGG (F Fund) (delayed)

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