Stocks opened lower on Thursday but for the first time in a few days we saw the bulls step up and buy the dip. The close wasn't all that impressive as investors kept their guard up heading into Friday morning's jobs report, but the Dow did hang onto an 82-point gain.
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The S-fund led the way in the TSP funds and the gains were modest across the board. The I-fund was down as the dollar rebounded, and bonds were up.
The April Jobs Report comes out today (Friday) and estimates are looking for a gain of 215,000 to 230,000 jobs and an unemployment rate of 5.4%. The Jobs Report Contest winner will be announced after the report is released. Click here for more information.
The SPY (S&P 500 / C-fund) posted an inside day where the high and low of the day were within the high and low of Wednesday's bar. That's not a great formation in a mini-downtrend, but it did manage to close back above the 50-day EMA, and the bulls will take any bone you throw at them these days. With so many folks calling for a top and talking about a correction, being above the 50-day EMA may help quell those ideas.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) broke down from a rising wedge in late April and has been hit pretty hard since, but now we may be seeing a new falling wedge pattern, and they tend to break to the upside. It is back below the 50-day EMA so that is a red flag.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Transportation Index had a big day gaining over 1% but it is still within what may be a head and shoulders pattern. The problem with deciphering the H&S is that they are generally bearish in downtrends, and bullish in bull markets. The Transports are in a bull market but currently in a short-term downtrend so it's not an easy call. Just keep an eye on the 8550-8600 area for support, which is the neckline. If that breaks we may have our answer.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE index / I-fund) fell below a major support line but remains above the 50-day EMA. It's hanging on for now. If the dollar remains weak it would be the stock fund to be in if you're in the stock funds.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The dollar broke below a bear flag on Wednesday, then on Thursday it spent the day trying to fill the gap it left open during that breakdown. This looks bearish but nothing goes straight down.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (bonds / F-fund) posted a modest bounce on Thursday and it's looking to hold at the longer-term support line. The jobs report could shake it up. I would expect a strong report to be bearish for bonds, but bonds always seem to have me leaning the wrong way.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Jobs Report Contest winner will be posted here after the release.
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Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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