Stocks rallied and posted gains of about a half of one percent after a solid jobs report which basically came in line with estimates. The Dow gained 88-points, small caps led the way higher, and bonds were down.
I have been out of town working on my laptop in a hotel room - not may favorite way to write my commentary. I played in a World Series of Poker event for the first time in many years. They put on quite a production at the Rio Hotel for this event. There were 4400 players in this one. Anyway, that's why I'm on the road and I appreciate your patience if you've had to wait a little longer for me to respond to any issues. Don't ask how I did.
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The SPY (S&P 500 / C-fund) broke out above many areas of resistance last week, including a rising wedge formation, and it is a little unusual to see a rising wedge break to the upside. It's possible that it is a "fake-out", but with the S&P 500 sitting at about 1950, it wouldn't surprise me to see investors try to push it to 2000. It would have to defy gravity to do so, but that may be what we see happening.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Wilshire 4500 broke above its bull flag, doing what a bull flag is supposed to do. This looks like a bullish chart despite the fact that it is still lagging the other major indices. The old highs near 1040 may be a temporary road block, although we saw the Nasdaq 100 (QQQ) cut through its old high pretty easily recently.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
And here is the QQQ. There was about a week of sideways action before the breakout, but no real pullback from that old high resistance. The gap remains open and we know they like to eventually get filled. Usually sooner rather than later, although the small open gap from February took 2 months to get filled - but it did get filled.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar put in a nasty outside reversal day last week and that should be bearish for the dollar. If the big open gap decides to get filled, the I-fund may be outperforming the C and S funds in the process.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The AGG (bonds / F-fund) rebounded off of some support last week, but not until it fell below some key support. This looks a little bearish for bonds going forward but if that 2nd support line can hold, perhaps it won't be so bad.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
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Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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