06/07/13
Update:The May jobs report came in with a gain of 175,000 jobs and an unemployment rate of 7.6%. Estimates were looking for closer to 160,000 and an unemployment rate of 7.5%. Job gains for March and April were revised down 12,000. March's increase was from 138,000 to 142,000, and April's, from 165,000 to 149,000.
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The market showed some signs of panicking in early afternoon trading yesterday. Panic may be too strong considering how close the indices are to recent highs, but the mid-day 100-point loss after Wednesday's 200-point drop may have triggered enough bearishness to produce a relief rally, and of the course the Dow bottomed and closed up 80-points by the close.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0050%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.10%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.86%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+1.20%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.12%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Nervousness ahead of today's (Friday) important jobs report seemed to be the early buzz, and this jobs report is important. With estimates around +159,000, there is little room for error. So what is a good number? If the number is too small, the market could sell off because of a slowdown in the economy. If it's too high, it would give the Fed ammunition to lighten up on their $85B a month easing policy. I think the sweet spot might be between +150,000 and +170,000. That's doable, but a small target.
The S&P 500 reversed up after falling below the 50-day EMA in early trading. There is still short-term resistance so the the index is still in a little trouble.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer-term chart shows that the rising trading channel is still pretty much intact and it looks like a pretty good risk reward area to be a buyer if you are on the sidelines. If the support breaks, you can cut your losses quickly. If the support holds, we could see a test of one or both of the rising trading channel resistance lines.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar fell sharply yesterday and to be honest, I don't know exactly why, which may be better for a technical analyst. I'd prefer to let the chart tell me what's going on so I don't try to out-guess the fundamentals.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What I do know is that the drop in the dollar sent bond prices higher, but bonds hit some resistance and they pulled back finishing well off their highs, while the dollar closed off its lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's a comparison of Thursday's action between the 7-10 year Treasuries ETF and the dollar ETF. You can see that they are moving in opposite directions.
The TSP Talk Sentiment Survey came in at 42% bulls, 50% bears for a ratio of 0.84 to 1. That's a buy signal. The AAII survey came in at 30% bulls, 39% bears for a 0.76 to 1 ratio. Both look pretty bullish for stocks.
So, the stock indices have done a good job of pulling back since the May 22 intraday high, and now they are trying to bounce off of some key support areas. I hate to rely on one report to make of break the market, but as I mentioned above, there's a lot rising on Friday's jobs report.
Thanks for reading! Have a great weekend!
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.
Update:The May jobs report came in with a gain of 175,000 jobs and an unemployment rate of 7.6%. Estimates were looking for closer to 160,000 and an unemployment rate of 7.5%. Job gains for March and April were revised down 12,000. March's increase was from 138,000 to 142,000, and April's, from 165,000 to 149,000.
---------------------------
The market showed some signs of panicking in early afternoon trading yesterday. Panic may be too strong considering how close the indices are to recent highs, but the mid-day 100-point loss after Wednesday's 200-point drop may have triggered enough bearishness to produce a relief rally, and of the course the Dow bottomed and closed up 80-points by the close.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0050%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.10%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.86%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+1.20%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.12%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Nervousness ahead of today's (Friday) important jobs report seemed to be the early buzz, and this jobs report is important. With estimates around +159,000, there is little room for error. So what is a good number? If the number is too small, the market could sell off because of a slowdown in the economy. If it's too high, it would give the Fed ammunition to lighten up on their $85B a month easing policy. I think the sweet spot might be between +150,000 and +170,000. That's doable, but a small target.
The S&P 500 reversed up after falling below the 50-day EMA in early trading. There is still short-term resistance so the the index is still in a little trouble.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer-term chart shows that the rising trading channel is still pretty much intact and it looks like a pretty good risk reward area to be a buyer if you are on the sidelines. If the support breaks, you can cut your losses quickly. If the support holds, we could see a test of one or both of the rising trading channel resistance lines.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar fell sharply yesterday and to be honest, I don't know exactly why, which may be better for a technical analyst. I'd prefer to let the chart tell me what's going on so I don't try to out-guess the fundamentals.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What I do know is that the drop in the dollar sent bond prices higher, but bonds hit some resistance and they pulled back finishing well off their highs, while the dollar closed off its lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's a comparison of Thursday's action between the 7-10 year Treasuries ETF and the dollar ETF. You can see that they are moving in opposite directions.
The TSP Talk Sentiment Survey came in at 42% bulls, 50% bears for a ratio of 0.84 to 1. That's a buy signal. The AAII survey came in at 30% bulls, 39% bears for a 0.76 to 1 ratio. Both look pretty bullish for stocks.
So, the stock indices have done a good job of pulling back since the May 22 intraday high, and now they are trying to bounce off of some key support areas. I hate to rely on one report to make of break the market, but as I mentioned above, there's a lot rising on Friday's jobs report.
Thanks for reading! Have a great weekend!
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.
