The jobs report helped stocks to some big gains on Friday as the Dow picked up 199-points. The broader indices didn't do quite as well, but still had impressive gains. The small cap fund added 0.65% and bonds inched up as well.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 167"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0063%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="align: right"] +0.02%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="align: right"] +1.13%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="align: right"] +0.65%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="align: right"] +0.59%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The futures are up some as I write this Sunday night and it wouldn't be a surprise to see some upside follow-through action when the market opens Monday, but Monday morning gaps are generally not very trustworthy, and there is a tendency for big moves in the market that were triggered by a surprise in the jobs report, to be reversed in the following trading days.
As far as the 7.0% unemployment rate goes, you would think investors would take that as a negative since it is closer to the Fed's target for tapering their bond buying program. When you look at all of the jobs data it wasn't quite as good as the market may have made it seem, but that 7.0% was a surprise, got the headlines, and caused the rally.
The S&P 500 (SPY) gapped up on Friday bouncing off what might be the bottom of a new parallel rising trading channel. I expect the open gap to get filled before long since that is typical gap technical analysis. The question will be whether another test of that new rising support will hold.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps were up "only" 0.8% on Friday so they lagged the larger stocks a bit. I sound like a broken record, but this is still a great looking chart as long as the trend is up and the support is holding.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The large tech stocks of the Nasdaq 100 (QQQ) actually made a new high on Friday, which is interesting since the biggest of all tech stocks, Apple (AAPL) was down 1.4% on the day. But you always want to see technology leading the way in a bull market so this is a good sign.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We know December is a strong month historically, but the real strength has come during the latter half of the month. Today is the 6th trading day in December and you can see there is some negative seasonality for stocks for about another week.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Of course there are no guarantees and each year can always throw a surprise at us. Like last year when stocks actually fell sharply during the last two weeks of the year before we had a big New Years Eve positive reversal day (Dec. 31) that led to a big January.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The bond ETFs saw a small gain on Friday but these charts are not looking very good. If, however, that neckline can be recaptured, we could see a rebound, but in general those head and shoulders patterns are not very bullish for bonds.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yields are testing the higher end of a rising channel and the jobs report may have created some negative reversal days on the 10 and 30 year yield charts. So the trend is up, but there is some room on the downside for yields, which would move counter to bond prices and the F-fund.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
In today's TSP Talk Plus Report we look at an interesting combination of post-jobs report rallies when the Smart / Dumb Money Confidence indices are at an extreme. 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
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