Stocks were mixed on Thursday and we finally saw the small caps and Nasdaq outperform the Dow and S&P 500. The Dow lost 22-points so perhaps investors were doing some bargain hunting, buying up the stocks that have been beat up.
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The I-fund led the way and bonds had another good day as investors continue to digest the meaning of the weak GDP report. We get the April jobs reports this morning (Friday) and that may give us a little more information about the strength of the economy. Estimates are looking for a gain of 210,000 jobs, with an unemployment rate of 6.6%.
The SPY (S&P 500 / C-fund) closed at 188; an area that needs to be broken if the rising trend is going to continue. The two prior breakout attempts above 188 failed so clearly this is an important area for the bulls. The jobs report could be the catalyst that makes or breaks 188, but then again, a push above it could bring in sellers just like in early April. Failed breakouts tend to intensify the selling.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Despite a modestly higher day, the Nasdaq (below left) is still languishing below the resistance line and the 50-day EMA. The Nasdaq 100, which are the larger etch stocks of the Nasdaq, broke and closed above the 50-day EMA, and temporarily moved above the resistance line, but it could not hold the resistance by the close.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) had a good day, outperforming the big boys, but it remains below some key resistance. Today's jobs report will obviously have a big impact on whether we see a breakout on Friday or not.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index had a good day as it reached toward new highs again, but it created a negative kangaroo tail which may be a concern for the short-term. Staying above 7600 is key as it appears to be the support line of the cup and handle breakout point.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds are hitting the tops or their trading channels and the IEF temporarily broke out, but that 102.50 level seems to be some trouble for that ETF.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
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Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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