The Dow was up nicely on Thursday gaining 167-points led by Boeing and Dow Inc., but the broader indices were more mixed with the S&P 500 posting modest gains, and the Nasdaq dipping a few points. Bond yields slipped a bit, possibly the reason for the mostly quiet day for stocks yesterday, as we await the March jobs report on Friday.
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The market keeps plugging along. There was no new month / new quarter reversal as we suspected there could be, and it feels like investors are worried about missing out on any kind of trade deal announcement with China as we've gotten small rallies almost every time it is mentioned, so there's a lot of optimism, but it's been like the carrot on a stick tease for a long time now.
Earnings season is getting closer and can't get here fast enough as the market is running out of catalysts (positive or negative) now that yields have stabilized.
Of course the next catalyst will be the March Jobs report which will be released this morning before the opening bell and estimates are looking for a gain of 170,000 jobs, an unemployment rate of 3.8%, and wage growth at +0.2%. As we mentioned yesterday, a good or bad number may be fine for stocks, unless we get the old "sell the news" reaction as stocks rallied into this no lose situation. As a reminder, since no one is concerned about the Fed raising rates anymore, a big number won't be a problem, and a weak report could ignite some rate cut talk.
The S&P 500 (C-fund) closed higher after a midday swoon took it into negative territory. There's some overhead resistance but the trend remains up. However, a pullback to fill that gap is a good possibility after 6 consecutive positive days.
The DWCPF (S-fund) has already edged above its resistance line although it is still slightly below the February highs, which is a bit of a surprise given that it feels like it has been up almost every day.
The Dow Transportation Index added onto recent gains but stalled again at the February highs.
The EFA (I-fund) pulled back slightly trying to fill that small open gap from the day before. We're seeing the 50-day EMA cross back over the 200-day EMA, something that happened on the S&P 500 in early March. While that is a bullish sign for the intermediate-term, it can sometimes trigger a short-term overbought dip - which did happen on the S&P 500 when it crossed.
I have mentioned before that the High Yield Corporate Bonds and the credit market is basically in a major bubble and may be the first tell when stocks are going to peak. There's been no signs of weakness here yet, but this 10+ year weekly chart shows just how far this Fund has gone with only a few hiccups along the way. In the short-term it is hitting the top of a rising wedge formation as well as the bottom of an old support line. When this bubble pops it will be heard around the world... but when?
The AGG (F-fund) moved slightly higher as yields dipped slightly. It's trying to hold above that dashed rising support line, but that open gap is still going to get some attention.
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. Have a great weekend!
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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The market keeps plugging along. There was no new month / new quarter reversal as we suspected there could be, and it feels like investors are worried about missing out on any kind of trade deal announcement with China as we've gotten small rallies almost every time it is mentioned, so there's a lot of optimism, but it's been like the carrot on a stick tease for a long time now.
Earnings season is getting closer and can't get here fast enough as the market is running out of catalysts (positive or negative) now that yields have stabilized.
Of course the next catalyst will be the March Jobs report which will be released this morning before the opening bell and estimates are looking for a gain of 170,000 jobs, an unemployment rate of 3.8%, and wage growth at +0.2%. As we mentioned yesterday, a good or bad number may be fine for stocks, unless we get the old "sell the news" reaction as stocks rallied into this no lose situation. As a reminder, since no one is concerned about the Fed raising rates anymore, a big number won't be a problem, and a weak report could ignite some rate cut talk.
The S&P 500 (C-fund) closed higher after a midday swoon took it into negative territory. There's some overhead resistance but the trend remains up. However, a pullback to fill that gap is a good possibility after 6 consecutive positive days.
The DWCPF (S-fund) has already edged above its resistance line although it is still slightly below the February highs, which is a bit of a surprise given that it feels like it has been up almost every day.
The Dow Transportation Index added onto recent gains but stalled again at the February highs.
The EFA (I-fund) pulled back slightly trying to fill that small open gap from the day before. We're seeing the 50-day EMA cross back over the 200-day EMA, something that happened on the S&P 500 in early March. While that is a bullish sign for the intermediate-term, it can sometimes trigger a short-term overbought dip - which did happen on the S&P 500 when it crossed.
I have mentioned before that the High Yield Corporate Bonds and the credit market is basically in a major bubble and may be the first tell when stocks are going to peak. There's been no signs of weakness here yet, but this 10+ year weekly chart shows just how far this Fund has gone with only a few hiccups along the way. In the short-term it is hitting the top of a rising wedge formation as well as the bottom of an old support line. When this bubble pops it will be heard around the world... but when?
The AGG (F-fund) moved slightly higher as yields dipped slightly. It's trying to hold above that dashed rising support line, but that open gap is still going to get some attention.
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. Have a great weekend!
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.
