Stocks sold off at the open on Friday after a much better than expected jobs report. Estimates were looking for a gains of 181,000 jobs, and the actual number was +271,000. The positive surprise initially sent stocks lower as it may have solidified a rate hike by the Fed in December. The unemployment rate dipped to 5.0%.
After the initial decline, buyers stepped right up and grinded the indices higher into the close and the Dow, which was down about 95-points in the first hour of trading, ended the day up 47-points. It wasn't a huge move in either direction, but it goes to show how uncertain investors are right now, about whether they want strong economic data, or weak, because of the possibility of an interest rate hike in December.
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Small caps led, which is interesting since they are usually most negatively impacted by rate hikes, but they also feed on growth. The I-fund lagged because of a big rally in the dollar. Bonds were down sharply.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart of the S&P 500 continues to move higher although it created a negative kangaroo tail closing off the weekly highs on Friday. There is also a very small open gap near 1950 and they almost always get filled at some point, on weekly charts.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow Completion Index (small caps / S-Fund) posted two successive positive reversal days but is still struggling to get above the 200-day EMA.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The chart of the Dow Transportation Index is improving but it is also having a difficult time breaking out above the 200-day EMA and September and October's highs.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) temporarily dipped below the 50-day EMA on Friday morning but managed to close back above it. It had gapped down and basically filled the gap by the close. It's in a very short-term downtrend after hitting the 200-day EMA last month. The strength in the dollar made it the lagging TSP fund for the day and the week.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The price of oil was down sharply again on Friday as the dollar rallied putting pressure on it, and other commodities, keeping the pullback going. There is a possible lower high being formed now.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The dollar gapped up after the jobs report and it is making a new multi-month high on the strong economic data. We know gaps tend to get filled but that old resistance line may try to act as support now.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) gapped down again and has really struggled since the earlier gap down from the highs late in October. The 200-day EMA did not hold as support but if it is going to fill the new gap it would have to crawl back above it.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Per www.tsp.gov: Some financial markets will be closed on Wednesday, November 11th in observance of the Veterans Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Wednesday night (November 11th) will be processed Thursday night (November 12th), at Thursday's closing share prices.
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Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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