05/06/13
Stocks rallied strongly on Friday after the better than expected jobs report. The Dow gained 142-points, briefly getting above 15,000 for the first time, while the S&P 500 closed above 1600 for the first time.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.40%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+1.06%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+1.24%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+1.46%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
There were about 10,000 more jobs added in April than consensus estimates, and the unemployment rate slipped to 7.5%. That was good but investors were more impressed with the large upward revision made to the very weak March report where 50,000 more jobs were added to the original 88,000 making it +138,000. These revisions are so common and many times they are very different than the original numbers that it makes you wonder why they bother to give to the initial report on the first Friday of the month. It makes for good trading otherwise it seems senseless to give guesses that are so far off.
The S&P 500 clearly broke out to new highs and the upward trend keeps rolling along. I guess we should not be surprised after only 43% of those responding to our sentiment survey last week said they were bullish. That means there were likely a lot of investors sitting in cash that may be starting to chase this market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer term parallel trading channel was also broken, but this is more often a sign of being extended. Granted, the charts look good, but short-term things are pretty overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a couple of the leaders, the small caps of the Russell 2000 made a new intraday high on Friday, but surprisingly backed off by the close and finished near the prior highs. It could be a reversal day but the S&P and Dow didn't show this same pattern.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index also backed off near the prior highs so we'll have to see how these two follow through today (Monday).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I mentioned this in the Weekly-Wrap up but for those who may not have read it...
We've talked about the "Sell in May and go away" strategy where over the years stocks have performed much better during the six month period between November and April than from May to October. As I pointed out in one of our commentaries in April, it might be better to say, "Sell in May, but not right away" because the first three days of the month are actually historically quite strong.
Chart provided courtesy of www.sentimentrader.com , analysis by TSP Talk
But those 3 days are behind us now, and May's historical seasonality chart gets much more negative until we get toward Memorial Day.
Thanks for reading! We'll see you 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 rallied strongly on Friday after the better than expected jobs report. The Dow gained 142-points, briefly getting above 15,000 for the first time, while the S&P 500 closed above 1600 for the first time.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.40%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+1.06%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+1.24%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+1.46%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
There were about 10,000 more jobs added in April than consensus estimates, and the unemployment rate slipped to 7.5%. That was good but investors were more impressed with the large upward revision made to the very weak March report where 50,000 more jobs were added to the original 88,000 making it +138,000. These revisions are so common and many times they are very different than the original numbers that it makes you wonder why they bother to give to the initial report on the first Friday of the month. It makes for good trading otherwise it seems senseless to give guesses that are so far off.
The S&P 500 clearly broke out to new highs and the upward trend keeps rolling along. I guess we should not be surprised after only 43% of those responding to our sentiment survey last week said they were bullish. That means there were likely a lot of investors sitting in cash that may be starting to chase this market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer term parallel trading channel was also broken, but this is more often a sign of being extended. Granted, the charts look good, but short-term things are pretty overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a couple of the leaders, the small caps of the Russell 2000 made a new intraday high on Friday, but surprisingly backed off by the close and finished near the prior highs. It could be a reversal day but the S&P and Dow didn't show this same pattern.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index also backed off near the prior highs so we'll have to see how these two follow through today (Monday).
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I mentioned this in the Weekly-Wrap up but for those who may not have read it...
We've talked about the "Sell in May and go away" strategy where over the years stocks have performed much better during the six month period between November and April than from May to October. As I pointed out in one of our commentaries in April, it might be better to say, "Sell in May, but not right away" because the first three days of the month are actually historically quite strong.
Chart provided courtesy of www.sentimentrader.com , analysis by TSP Talk
But those 3 days are behind us now, and May's historical seasonality chart gets much more negative until we get toward Memorial Day.
Thanks for reading! We'll see you 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.
