Thread: tsptalk's Market Talk

Small caps are kicking butt today, which seems a little odd. The Fed is now in full rate hike mode and with the new bills passing through congress, inflation is only likely to get worse - and small caps hate high interest rates.

Are they going to make it that easy - a pullback off the double top / 200-day EMA? I hope so, but probably not. The CPI tomorrow could change everything. I hope I'm wrong but I think they will try to break this out above resistance, then pull it back down after they've sucked in more victims. Although if the CPI is benign enough, perhaps a breakout that holds is possible. The jobs report last Friday showed us any number is possible.



Yields are staying stubbornly buoyant above the neckline of that head and shoulders pattern and perhaps still trying to fill that open gap.

Looks like today will be the day that they run short stops above resistance. But will it hold or will it be another fake out like in the chart below?

Originally Posted by tsptalk

Yields and the dollar are pulling back after Friday's rally, and stocks are bouncing after the early Friday jobs report "scare."

The S&P has nudged up to its 200-day EMA and may look to go a little further to simulate a breakout and suck more people in. You can see in the 1-year chart below that they tend to fake us out with those breakouts / breakdowns before reversing.

WSJ calling a new bull market in the Nasdaq after today's close.

U.S. stocks capped a strong rally Wednesday by roaring into the close, sending the Nasdaq Composite Index back into bull territory and ending the longest Nasdaq bear market since the financial crisis.

Originally Posted by Bullitt

WSJ calling a new bull market in the Nasdaq after today's close.

Contrarian indicator?

I don't like when resistance is broken higher with a gap up since it almost guarantees backfilling somewhere along the line. Would rather have seen an open in the red, then the big move. Massive short covering today on this inflation number today right out of the gate.

WSJ did call a new bull market some time in early April 2020 and they got that one right. The bearish guys I follow are more bearish than ever and calling for a collapse, but then again, they tend to always say that kind of thing.

For Thursday morning:

PPI estimate: 0.3%
prior month: 1.1%

Core PPI estimate: 0.4%
prior month: 0.4%

On a year-over-year basis, the PPI in June for final demand was up 11.3%, versus 10.9% in May.

Originally Posted by tsptalk

For Thursday morning:

PPI estimate: 0.3%

Core PPI estimate: 0.4%

Actual PPI: -0.5% (analysts really missed the boat on this one.)

Actual Core PPI: 0.2%

Stocks up after the softer than expected PPI. Yields are upas well, and the dollar is down.

The High Yield Corporate Bond Fund is up again (2 consecutive gaps), and this time it move above the 200-day EMA. It's now dealing with a possible double top, but this sure has been strong and a good sign for stocks.

Stocks are up after Thursday negative reversal day. Intraday reversals have historically been good indicators for more short-term action in the direction of the reversal, but that really hasn't been the case in recent months. I circled those recent negative reversals. Most led to a little downside follow through, but not always that much, but there could be some sellers in the 4250 area again since the people who gave back gains yesterday don't want to see that repeated.



So far this has been an "inside day" as the S&P trades within Thursday's range, but it's very early and that could change.

Yields are down (bond prices up) and the dollar is up in early trading today.

Originally Posted by tsptalk

... there could be some sellers in the 4250 area again since the people who gave back gains yesterday don't want to see that repeated.

Here we are:

Day's Range for S&P: 4,219.78 - 4,249.52