Stocks soared on Friday after a better than expected jobs report. Investors obviously embraced a report that basically cemented a rate hike next week. The November jobs report came in at +211,000, which was about 10K to 15K more than expected.
The 370-point rally in the Dow more than erased Thursday's major sell-off after the ECB disappointed investors announcing smaller than expected stimulus measured. There are some concerns with the rally, which we'll talk about below, but for traders who caught those gains, it was all good.
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It was interesting that the initial reaction to the jobs report in pre-hours trading was quite negative. The S&P 500 futures fell 15-points, or about 0.75% in the first half hour before the market stabilized and took off for the rest of the day. This is a 5-minute chart, in Central Time, of the S&P 500 E-mini futures...
There were some concerns with the rally evidenced by the small and midcap stocks lagging quite a bit on Friday, and overall since the lows in August. For the week the S-fund actually lost ground while the large stocks continue to be the favorites as the C-fund gained 0.58%.
The SPY (S&P 500 / C-fund) erased all of Thursday's big losses and recaptured the breakdown from that dashed rising support line. Volume was healthy and it is now flirting with the new highs again. To be skeptical of this you have to look a little deeper (and I will show the TSP Talk Plus subscribers a little more of that data.)
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (small caps / S-fund) had a nice day, but only gained about half of what the S&P 500 gained, which is somewhat of a concern but a 1% gain is a 1% gain. It closed back above the 50-day EMA after closing below it for just one day.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
I am not showing it, but the lagging Dow Transportation Index only added 0.88% and is still in some bad shape technically.
The EFA (EAFE Index / F-Fund) gained 0.81% but our I-fund did not reap all of those rewards because of strength in the dollar and because a large part of the gains came after the Far East and European markets had already closed, so they should benefit with today's share price.
Chart provided courtesy of www.stockcharts.com, analysis by TSP TalkHere is some historical data showing prior times that the
S&P 500 gained more than 2% on a jobs report Friday, so it wouldn't be a surprise to see some or all of those gains disappear this week.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The VIX (Volatility Index / fear gauge) dropped right back below the 200-day EMA on Friday's rally, and I could be wrong, but based on some of the other data shown today, I think this sets up some complacency that could be misplaced.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-Fund) rallied on the strong jobs report and it looks to be trying to fill that open gap near 108.60. Technically, this remains below support and would need to fill that gap and hold to fix that technical breakdown.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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.
The 370-point rally in the Dow more than erased Thursday's major sell-off after the ECB disappointed investors announcing smaller than expected stimulus measured. There are some concerns with the rally, which we'll talk about below, but for traders who caught those gains, it was all good.
[TABLE="width: 89%, align: center"]
[TR]
[TD="width: 180, align: center"]
[TD="width: 49, align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
It was interesting that the initial reaction to the jobs report in pre-hours trading was quite negative. The S&P 500 futures fell 15-points, or about 0.75% in the first half hour before the market stabilized and took off for the rest of the day. This is a 5-minute chart, in Central Time, of the S&P 500 E-mini futures...
There were some concerns with the rally evidenced by the small and midcap stocks lagging quite a bit on Friday, and overall since the lows in August. For the week the S-fund actually lost ground while the large stocks continue to be the favorites as the C-fund gained 0.58%.
The SPY (S&P 500 / C-fund) erased all of Thursday's big losses and recaptured the breakdown from that dashed rising support line. Volume was healthy and it is now flirting with the new highs again. To be skeptical of this you have to look a little deeper (and I will show the TSP Talk Plus subscribers a little more of that data.)
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (small caps / S-fund) had a nice day, but only gained about half of what the S&P 500 gained, which is somewhat of a concern but a 1% gain is a 1% gain. It closed back above the 50-day EMA after closing below it for just one day.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
I am not showing it, but the lagging Dow Transportation Index only added 0.88% and is still in some bad shape technically.
The EFA (EAFE Index / F-Fund) gained 0.81% but our I-fund did not reap all of those rewards because of strength in the dollar and because a large part of the gains came after the Far East and European markets had already closed, so they should benefit with today's share price.
Chart provided courtesy of www.stockcharts.com, analysis by TSP TalkHere is some historical data showing prior times that the
S&P 500 gained more than 2% on a jobs report Friday, so it wouldn't be a surprise to see some or all of those gains disappear this week.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The VIX (Volatility Index / fear gauge) dropped right back below the 200-day EMA on Friday's rally, and I could be wrong, but based on some of the other data shown today, I think this sets up some complacency that could be misplaced.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-Fund) rallied on the strong jobs report and it looks to be trying to fill that open gap near 108.60. Technically, this remains below support and would need to fill that gap and hold to fix that technical breakdown.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
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.
