Stocks were down modestly yesterday but closed well off the morning lows. The Dow lost 21-points but an early triple digit loss was all but erased after the Fed indicated that employment will have to get much better before they turn off the spigots.
[TABLE="width: 80%, align: center"]
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[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
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[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0056%[/TD]
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[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] -0.27%[/TD]
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[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] -0.27%[/TD]
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[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] -0.38%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] -0.26%[/TD]
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[TD="align: right"] [/TD]
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In the past, the Fed had indicated that that they wanted to see the unemployment rate hit 6.5% before ending their bond buying program, but yesterday they indicated that it may need to get to 6.0% or even lower before acting. Stocks were down sharply until this new bone was thrown to them.
The S&P 500 (SPY) continues to hold onto support just below the recent highs. Volume was light again, perhaps because investors are waiting for the jobs report on Friday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow has remain below the September high double top and if this chart went back further, we'd see a triple top with the August high so this is some stiff resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index pulled back to fill the small gap created on Monday morning, but this leader remains in a sharply ascending trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds dropped yesterday as we saw the large gaps filled, or nearly filled on these long and intermediate-term bond funds. The 7 to year fund fell below the rising support line, but did find support at the 50-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yields rose sharply with both the 10 and 30-year moving above the descending resistance line and the 50-day EMAs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The October Jobs Report will be released on Friday morning. Current estimates are looking for a gain of 100,000 jobs and an unemployment rate of 7.3%.
In today's TSP Talk Plus report we go over several indicators including the put / call ratios and the smart money / dumb money confidence indicator. 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 TSP Talk Market Commentary
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