View RSS Feed

TSP Talk Blog

TSP Talk: Selling before the big earnings reports, and after?

Rate this Entry
Stocks were lower on Tuesday - another Turnaround Tuesday perhaps after 5 straight positive days for most of the major indices. Once again the dip buyers weren't too far behind as the indices did close well off their early lows, but some earnings after the bell started to shake things up again in the after hours trading. The Dow lost a modest 86-points on the day, but percentage-wise the S&P 500, the small caps, and particularly the Nasdaq all saw more pronounced losses. The Transports were the big loser falling over 2%.
Daily TSP Funds Return

The CDC recommending vaccinated and unvaccinated people wear masks again, may have been part of the reason for the selling, but after the 5-day rally, the market may have been looking for any reason..

Yesterday I said that money managers don't tend to do a lot of selling before major earnings releases (or an FOMC meeting), but the market really enjoys proving me wrong and we saw a fairly big sell off on Tuesday before the release of earnings from Apple, Microsoft, Alphabet (aka Google), Starbucks, and Visa after the bell. Apple, Microsoft, Starbucks, and Visa were all down after after the bell yesterday, despite most of them posting solid, better than expected earnings reports. So it was a sell the news reaction for sure, and the "whisper numbers' must have been higher. Alphabet (aka Google) was the lone winner as it was moving higher after hours.

Today is day two of a two-day FOMC meeting so we could see more fireworks again. The Fed usually has the market's back and with the latest COVID scare making the rounds, I can imagine that they won't be saying anything too hawkish, but again, the market loves to do what we, or should I say "I", least expect.

The 10-year Treasury yield was down again so we still see signs from the bond market that they are a little nervous about economic growth.

Internally the numbers were as negative as you'd expect on a day when all the indices are down. The one stark number was the 241 new lows on the Nasdaq yesterday - just one day after the index posted its all time closing high.





The S&P 500 (C-fund) fell sharply early on Tuesday, filled last Friday's open gap, and started to rebound again. There's still a chance that it could come down to test the bottom of its rising trading range and the 50-day EMA, but the dip buyers didn't seem to want to allow it to go down that low again so quickly. I suppose if the COVID news and cases start to move in the wrong direction, that could change.




The DWCPF (S-fund) fell sharply below the 50-day EMA in early trading, but came right back to close above it. No harm, no foul as long as it can stay above there, but we saw a similar move in early May that did precede a pullback.




The EFA / I-fund held up a little better than the other funds and that was likely because of the loss in the dollar. It also closed above its 50-day EMA after a brief breakdown yesterday. It did fall back into that descending trading channel with yesterday's loss.




The Dow Transportation Index had a poor day and it looks like the 50-day EMA continued to be stubborn resistance since it broke below it in June. It also fell back below that 100-day average which had been holding all year until this month.




The BND (bonds / F-fund) was up sharply as yields slipped yet again. That does look like a mini-bear flag above the old resistance line, so that will be a little battle between a bearish formation and some bullish support.




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

For more info our other premium services, please go here... www.tsptalk.com/premiums.html

To get weekly or daily notifications when we post new commentary, sign up HERE.

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.

Submit "TSP Talk: Selling before the big earnings reports, and after?" to Digg Submit "TSP Talk: Selling before the big earnings reports, and after?" to del.icio.us Submit "TSP Talk: Selling before the big earnings reports, and after?" to StumbleUpon Submit "TSP Talk: Selling before the big earnings reports, and after?" to Google

Comments


S&P500 (C Fund) (delayed)

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

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

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

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes