06/06/13
Stocks fell sharply yesterday with losses near 1.5% across the board and very little signs of the bulls wanting to do any buying. The Dow lost 217-points and the S&P was sent to a very important support line.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 155"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0050%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.04%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-1.35%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-1.38%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-1.72%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 broke below the falling wedge pattern, not a terribly good sign, but it is at or near the 50-day EMA and the longer-term rising support line, so things get a little more serious at this point.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index ETF fell below the 50-day EMA and the recent rising support line, but it is sitting on a couple weaker support lines. Here's another index at an important juncture.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The put / call ratios are telling a fairly bullish story if you believe the CBOE put / call ratio is the dumb money, and the OEX put / call ratio is the smart money.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The CBOE ratio (dumb money) has fallen (on the chart, up in number) to a level seen 3 other times over the last 12-months. Each time the S&P was at, or close to, a low where a rally ensued.
The OEX ratio (smart money) has risen (on the chart, down in number) to level not seen since late 2010, while other readings above (on the chart) 1.30 have also come near market lows and prior to excellent buying opportunities.
These put/call ratios are good indicators but don't always give instant gratification so it can be frustrating to wait the days or weeks it could take. But in general, buying at these indicator levels has been a good risk / reward play.
Bonds have rallied off of recent lows but the 7 to 10 year bond ETF is hitting a couple of areas of resistance that may cause problems for the rebound.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yields, which move counter to bond prices, are still in a rising trading channel and this pullback (in yields) has fallen to the bottom of that trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On Friday we get the May jobs report. Although these reports are often revised, and in some cases dramatically, we know they can be big market movers. The question here is, has the weakness in the market been a premonition of a weaker report, where we may be seeing the first half of a "sell the rumor, buy the news" set up? Or will a weak report being the straw that breaks the camel's back and give us our first real correction in many months? Of course a strong report could give the bulls what they are looking for.
The consensus estimates for the jobs report are looking for a gain of 159,000 jobs and an unemployment rate of 7.5%.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
Stocks fell sharply yesterday with losses near 1.5% across the board and very little signs of the bulls wanting to do any buying. The Dow lost 217-points and the S&P was sent to a very important support line.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 155"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0050%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.04%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-1.35%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-1.38%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-1.72%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 broke below the falling wedge pattern, not a terribly good sign, but it is at or near the 50-day EMA and the longer-term rising support line, so things get a little more serious at this point.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index ETF fell below the 50-day EMA and the recent rising support line, but it is sitting on a couple weaker support lines. Here's another index at an important juncture.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The put / call ratios are telling a fairly bullish story if you believe the CBOE put / call ratio is the dumb money, and the OEX put / call ratio is the smart money.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The CBOE ratio (dumb money) has fallen (on the chart, up in number) to a level seen 3 other times over the last 12-months. Each time the S&P was at, or close to, a low where a rally ensued.
The OEX ratio (smart money) has risen (on the chart, down in number) to level not seen since late 2010, while other readings above (on the chart) 1.30 have also come near market lows and prior to excellent buying opportunities.
These put/call ratios are good indicators but don't always give instant gratification so it can be frustrating to wait the days or weeks it could take. But in general, buying at these indicator levels has been a good risk / reward play.
Bonds have rallied off of recent lows but the 7 to 10 year bond ETF is hitting a couple of areas of resistance that may cause problems for the rebound.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yields, which move counter to bond prices, are still in a rising trading channel and this pullback (in yields) has fallen to the bottom of that trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On Friday we get the May jobs report. Although these reports are often revised, and in some cases dramatically, we know they can be big market movers. The question here is, has the weakness in the market been a premonition of a weaker report, where we may be seeing the first half of a "sell the rumor, buy the news" set up? Or will a weak report being the straw that breaks the camel's back and give us our first real correction in many months? Of course a strong report could give the bulls what they are looking for.
The consensus estimates for the jobs report are looking for a gain of 159,000 jobs and an unemployment rate of 7.5%.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
