04/08/13
After a very weak jobs report, the market opened sharply lower on Friday as the Dow was down over 170-points in early trading. Stocks spent the rest of the day sliding higher, and a late surge nearly took the Dow back into positive territory. It lost 41-points on the day, but that was over 130-points off the low.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 157"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0036%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.25%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.43%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.17%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.94%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The intraday break of this year's rising support line on the S&P 500 was quickly recaptured and we see a nice little reversal pattern on many of the charts. Normally we see some follow-through after a reversal day like Friday, and the big trend of course, is the 13-days of alternating gains and losses in the S&P, and if that holds, we would see a positive day today (Monday.)
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The problem is, history suggests the odds favor more weakness in the short-term after a 1% gap down on the day of a jobs report, and the day after the jobs report, which would be today (Monday), only closed in positive territory 19% of the time going back to 1996. Things improve historically after 2 weeks.
Chart provided courtesy of www.sentimentrader.com
The reversal action on Friday did improve the very short-term out look because of the tendency for follow-through in the direction of the reversal, but the longer term charts are giving us a hint a possible rollover from the peaks near the overhead resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
While most of the charts look the same, I mentioned the Housing Index the other day and I wanted to follow-up. Friday's low hit a perfect parallel support line compared to the overhead resistance so this trading channel is something to watch.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the Housing Index can rebound off of that support and make another move toward the top of the trading channel, I'd guess that the stock market would be apt to follow. If that support line breaks however, that could mean a correction in the stock market is brewing. Right now we are seeing a "pullback". A correction is considered a 10% fall from the highs.
The yield on the 10-year Treasury Note fell to a new 2013 low and fell below the bottom of it's intermediate-term rising trading channel. I like to give 3 to 5 days to confirm a break, but it's obvious that the bond market is a little nervous about something.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yesterday's jobs report sent investors into the bond market (bond yields go down as bond prices go up) as the TLT 20+ year bond fund gapped up on Friday, breaking above the intermediate-term descending trading channel - the opposite of what yields did.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Gaps tend to get filled quickly so we could see bond prices and the F-fund pullback in the short-term to try to fill that gap, but the key is whether or not these breakdowns / breakouts hold for 3 to 5 days suggesting a new trend.
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.
After a very weak jobs report, the market opened sharply lower on Friday as the Dow was down over 170-points in early trading. Stocks spent the rest of the day sliding higher, and a late surge nearly took the Dow back into positive territory. It lost 41-points on the day, but that was over 130-points off the low.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 157"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0036%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.25%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.43%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.17%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.94%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The intraday break of this year's rising support line on the S&P 500 was quickly recaptured and we see a nice little reversal pattern on many of the charts. Normally we see some follow-through after a reversal day like Friday, and the big trend of course, is the 13-days of alternating gains and losses in the S&P, and if that holds, we would see a positive day today (Monday.)
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The problem is, history suggests the odds favor more weakness in the short-term after a 1% gap down on the day of a jobs report, and the day after the jobs report, which would be today (Monday), only closed in positive territory 19% of the time going back to 1996. Things improve historically after 2 weeks.
Chart provided courtesy of www.sentimentrader.com
The reversal action on Friday did improve the very short-term out look because of the tendency for follow-through in the direction of the reversal, but the longer term charts are giving us a hint a possible rollover from the peaks near the overhead resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
While most of the charts look the same, I mentioned the Housing Index the other day and I wanted to follow-up. Friday's low hit a perfect parallel support line compared to the overhead resistance so this trading channel is something to watch.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the Housing Index can rebound off of that support and make another move toward the top of the trading channel, I'd guess that the stock market would be apt to follow. If that support line breaks however, that could mean a correction in the stock market is brewing. Right now we are seeing a "pullback". A correction is considered a 10% fall from the highs.
The yield on the 10-year Treasury Note fell to a new 2013 low and fell below the bottom of it's intermediate-term rising trading channel. I like to give 3 to 5 days to confirm a break, but it's obvious that the bond market is a little nervous about something.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yesterday's jobs report sent investors into the bond market (bond yields go down as bond prices go up) as the TLT 20+ year bond fund gapped up on Friday, breaking above the intermediate-term descending trading channel - the opposite of what yields did.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Gaps tend to get filled quickly so we could see bond prices and the F-fund pullback in the short-term to try to fill that gap, but the key is whether or not these breakdowns / breakouts hold for 3 to 5 days suggesting a new trend.
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.
