Stocks rallied early on Friday following a decent jobs report. But by early afternoon the bulls lost some steam and the selling intensified as we approached the close. The Dow ended the day down 61-points and the broader indices fell about 0.3%.
The I-fund lagged as the dollar rallied sharply on the jobs report, and bonds had a bad day as yields spiked on that strong economic report.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD="align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The futures are down moderately as I write this on Sunday evening, but Monday morning opens - especially gaps, aren't always trustworthy. And in a volatile market like the one we are in, if you don't like what you are seeing at the moment, just wait an hour. It may change.
The SPY (S&P 500 / C-fund) broke above the resistance of its wedge / pennant formation, which should be a bullish sign, but with only two closes above resistance, it still has time to be another fake-out or failed breakout.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
We went into last week with a crack in the long-term rising support line on the weekly chart, but the 3% rally in the S&P 500 last week not only sent it back into the trading channel, but it also created a bullish weekly outside reversal bar.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) broke out to new highs last week, and while it pulled back some on Friday, it is trying to hold above the 1070 breakout line. We were watching the pesky 1058 resistance line, but that was taken out on Thursday.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) had a bad day on Friday as the jobs report sent the dollar higher and that put a lot of pressure on the international stocks indices. It fell back below the 200-day EMA, which is a concern, but there is rising support down near 62, and if that open gap can get filled and hold, it will be a good test of this recent new uptrend in the I-fund.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The dollar (UUP) was up on Friday and filled the open gap (blue box) after it had pulled back for a few days. So far the 20-day EMA has been able to hold. It could easily fall back to fill the newly opened gap (red box) and that will leave the UUP in an interesting position. I won't speculate.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Oil managed to rally on Friday despite the dollar being up strongly, and that is a pretty good show of strength. The move higher on Friday also had it breaking above a small bull flag that had formed. The 50-day EMA is the next area of resistance that could be tested.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) gapped down on Friday after the jobs report. That's a pretty significant breakdown from the recent rising support line, and now there's not a whole lot of support until the 50-day EMA. That gap may get filled quickly, as gaps tend to do, but it would have to get get back above the 20-day EMA to do so.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and 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 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.
