5/07/12
Stocks sold off on Friday after a weaker than expected jobs report. The Dow lost 168-points after the report missed estimates by about 50,000 jobs.
There were some upward revisions to the February and March reports, and the unemployment rate did dip from 8.2% to 8.1%, but that is being attributed to the 342,000 people leaving the labor force. However we look at it, investors didn't like it, and the overnight futures are down sharply again as I write this Sunday night.
For the TSP, the C-fund was down 1.61% on Friday, the S-fund lost 1.64%, the I-fund fell 2.00%, and the F-fund (bonds) gained 0.15%.
For the weekly and monthly TSP returns, please see our recent TSP Weekly Wrap-Up.
The S&P 500 broke through the 50-day EMA and the rising support line and these are two pretty red flags. It is about to test the prior two April lows just below 1360 and that may tell us if this is just a test of the lower end of the recent 1350 to 1420 trading range.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I mentioned in the Weekly Wrap Up, in 2011 the first trading day in May was the high point of the year. Will the high on May 1st create a similar peak this year?
The Dow is going to test the 50-day EMA and new rising trading channel today, and assuming the negative futures hold into the open on Monday morning, we will at least see an intraday breakdown of those levels. Because there is a tendency for strong moves in the stocks market, created by a surprise in the jobs report, to be reversed in the coming days, it will be the close that will interest me most.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Russell 2000 did fill that open gap that we have been watching, and now we have what looks like a big head and shoulders pattern formed with the 785 area being the neckline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A breakdown from the neckline would give it a downside target near 740 (a 6% loss from here), but in a bull market, head and shoulders patterns do not always break to the downside.
Oil gave us a little fake out - breakout early last week, and has now broken down from the apex. The week jobs report seems to have spooked the oil market into thinking the economy may not be recovering as much as it thought just a few weeks ago. The 200-day EMA is being test right now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar (via the ETF; UUP) is bumping into resistance here as the 50 and 200-day EMA's are just above, as is the descending trend line. Should the dollar pullback from this resistance, it would give stocks a little help. But if we see a breakout above resistance, this sell-off in stocks could continue.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The TSP Talk Sentiment Survey came in at 36% bulls, 55% bears, for a bulls to bears ratio of 0.65 to 1. That is a buy signal which means the system will remain 100% S fund for this week.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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 sold off on Friday after a weaker than expected jobs report. The Dow lost 168-points after the report missed estimates by about 50,000 jobs.
There were some upward revisions to the February and March reports, and the unemployment rate did dip from 8.2% to 8.1%, but that is being attributed to the 342,000 people leaving the labor force. However we look at it, investors didn't like it, and the overnight futures are down sharply again as I write this Sunday night.
For the TSP, the C-fund was down 1.61% on Friday, the S-fund lost 1.64%, the I-fund fell 2.00%, and the F-fund (bonds) gained 0.15%.
For the weekly and monthly TSP returns, please see our recent TSP Weekly Wrap-Up.
The S&P 500 broke through the 50-day EMA and the rising support line and these are two pretty red flags. It is about to test the prior two April lows just below 1360 and that may tell us if this is just a test of the lower end of the recent 1350 to 1420 trading range.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I mentioned in the Weekly Wrap Up, in 2011 the first trading day in May was the high point of the year. Will the high on May 1st create a similar peak this year?
The Dow is going to test the 50-day EMA and new rising trading channel today, and assuming the negative futures hold into the open on Monday morning, we will at least see an intraday breakdown of those levels. Because there is a tendency for strong moves in the stocks market, created by a surprise in the jobs report, to be reversed in the coming days, it will be the close that will interest me most.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Russell 2000 did fill that open gap that we have been watching, and now we have what looks like a big head and shoulders pattern formed with the 785 area being the neckline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A breakdown from the neckline would give it a downside target near 740 (a 6% loss from here), but in a bull market, head and shoulders patterns do not always break to the downside.
Oil gave us a little fake out - breakout early last week, and has now broken down from the apex. The week jobs report seems to have spooked the oil market into thinking the economy may not be recovering as much as it thought just a few weeks ago. The 200-day EMA is being test right now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar (via the ETF; UUP) is bumping into resistance here as the 50 and 200-day EMA's are just above, as is the descending trend line. Should the dollar pullback from this resistance, it would give stocks a little help. But if we see a breakout above resistance, this sell-off in stocks could continue.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The TSP Talk Sentiment Survey came in at 36% bulls, 55% bears, for a bulls to bears ratio of 0.65 to 1. That is a buy signal which means the system will remain 100% S fund for this week.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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.
