Stocks opened higher on Monday but like Friday, they faded as the day evolved and closed near the lows of the day. The positive early trading came in spite of a weak PMI report and a sell off in China's market, so if it was just a matter of an intraday change in sentiment, I don't know, but the Dow ended with a 123-point loss.
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For the month of February, the stock indices made up some ground after a poor start, but the final results were mixed. The S-fund led with a 0.50% gain while the I-fund lagged badly. For the year, the F-fund continues to lead the way.
On Friday morning we get the February jobs report and estimates are looking for a gain of 180,000 jobs, and an unemployment rate of 4.9%. The Jobs Report Contest is now open in the forum. Click here.
The price of oil actually had a big day on Monday and while both stocks and oil had rolled over and headed down early, at about 2 PM ET (the chart below is in CT) oil rebounded and stocks did not, which is a change of pace for us.
China's Shanghai Index had a rough night on Monday losing nearly 3%, but it was down about 5% before bouncing off the January low not long before Monday's close. But that was a 10% pullback in just 3-days so we'll have to keep watching closely to see if that support can continue to hold.
The S&P 500 (C-Fund) pulled back below some key levels yesterday. We've been watching the 50-day moving averages and yesterday we saw the S&P 500 and SPY close back below them. You can also see the rising wedge pattern converging and the bottom of that wedge will be the next key level of support for the SPY to test.
Today is the first trading day in March and the last four months struggled during their first couple of weeks of trading. February started with a small gain on the first day of trading, but it quickly backed off. Will March be month number 5?
The Dow Completion Index (small caps / S-Fund) backed off from the key 50-day moving averages and the top of a wedge pattern. Like many indices, this one is in a make or break area.
The Dow Transportation Index led us down during the bear market but has really rebounded nicely since the January lows. It is actually up about 15% from those lows. Still officially (in my book) in a bear market, it will be important for the rest of the market to see this key leading index hold up.
The EFA (EAFE Index / I-fund) on the other hand has made a couple of lower highs creating a possible bearish pennant formation. The dollar has been rallying for the last three week holding the I-fund back a bit.
Gold had another nice day gaining about 1% on the day. As long as gold and bonds are rallying, you have to question the sustainability of the rebound in stocks, in my opinion.
Bonds remain in a bullish rising trading channel.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. 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 www.tsptalk.com/comments.php
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.
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For the month of February, the stock indices made up some ground after a poor start, but the final results were mixed. The S-fund led with a 0.50% gain while the I-fund lagged badly. For the year, the F-fund continues to lead the way.
On Friday morning we get the February jobs report and estimates are looking for a gain of 180,000 jobs, and an unemployment rate of 4.9%. The Jobs Report Contest is now open in the forum. Click here.
The price of oil actually had a big day on Monday and while both stocks and oil had rolled over and headed down early, at about 2 PM ET (the chart below is in CT) oil rebounded and stocks did not, which is a change of pace for us.
China's Shanghai Index had a rough night on Monday losing nearly 3%, but it was down about 5% before bouncing off the January low not long before Monday's close. But that was a 10% pullback in just 3-days so we'll have to keep watching closely to see if that support can continue to hold.
The S&P 500 (C-Fund) pulled back below some key levels yesterday. We've been watching the 50-day moving averages and yesterday we saw the S&P 500 and SPY close back below them. You can also see the rising wedge pattern converging and the bottom of that wedge will be the next key level of support for the SPY to test.
Today is the first trading day in March and the last four months struggled during their first couple of weeks of trading. February started with a small gain on the first day of trading, but it quickly backed off. Will March be month number 5?
The Dow Completion Index (small caps / S-Fund) backed off from the key 50-day moving averages and the top of a wedge pattern. Like many indices, this one is in a make or break area.
The Dow Transportation Index led us down during the bear market but has really rebounded nicely since the January lows. It is actually up about 15% from those lows. Still officially (in my book) in a bear market, it will be important for the rest of the market to see this key leading index hold up.
The EFA (EAFE Index / I-fund) on the other hand has made a couple of lower highs creating a possible bearish pennant formation. The dollar has been rallying for the last three week holding the I-fund back a bit.
Gold had another nice day gaining about 1% on the day. As long as gold and bonds are rallying, you have to question the sustainability of the rebound in stocks, in my opinion.
Bonds remain in a bullish rising trading channel.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. 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 www.tsptalk.com/comments.php
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.
