Stocks opened sharply higher on Monday morning, and like most big Monday opens, up or down, I was suspicious about whether it could hold or not. There was some selling in late morning taking away nearly half the early gains, but buyers stepped up and the Dow closed at +135-points - just off the daily highs.
[TABLE="width: 79%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The small caps finally had a nice day, taking the lead with a 1.8% gain in the Russell 2000, and a 1.56% gain in our S-fund, which is a small and midcap fund. The I-fund lagged and the F-fund (bonds) was slightly lower.
Here are the final returns for March, and the year to date returns through March 31.
The SPY (S&P 500 / C-fund) continued its rebound off of the 20-day EMA on Monday. So far the key support near 183 has held. Now the question is, can it make a new high or will it find resistance at the top of its recent trading range?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This candlestick chart shows yesterday's action actually produced a positive reversal day, which tends to be bullish for trading on Tuesday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps finally had a good day after lagging badly since topping near 120 on the Russell 2000 ETF. It may have also broke out of a falling wedge pattern as the bulls had hoped it would. But the 20-day EMA is now being tested so we'll see what kind of conviction the bulls have today.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq also broke out of its falling wedge, but it did not close as strongly as the other indices, which is a concern considering this is one of the market leaders. It hit the 50-day EMA and backed off creating a negative reversal day, which sets up an interesting situation for today because of the positive reversal day on the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market leading Transportation Index had a big day gaining 1.7% but it is also now testing the top of a flag-like pattern. Fortunately for the bulls, it is a bullish flag, if anything, and with it moving back above the strong rising support line, I like the odds of a breakout to the upside of this flag.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds were flat to slightly lower yesterday, but the TLT longer-term bond ETF put in a nasty negative reversal day and moved back into its trading range. This is one reason I like to give the 3 to 5 closes above a breakout before confirming it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The March jobs report is due out on Friday. Estimates are looking for a gain of 195,000 jobs, with an unemployment rate of 6.6%. We have our monthly jobs report contest going on right now in the forum. More info: Guess the Jobs Report Contest Mar'14
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey Results and its TSP and ETF Systems. 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
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.
