Stocks took a swan dive after a mostly positive open, but found support at about noon, and the dip buyers took over from there. The indices were mostly negative by the close with the Dow down 122-points and much smaller percentage losses for the Nasdaq and S&P 500 (C-fund), but the small caps of the Russell 2000 were up nicely helping our S-fund to a slight gain, and the Transports gained back over 1% of their recent losses.
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There was a bit of a Fed hangover and we saw that in stocks but more particularly in the bond market where yields rallied again sending the F-fund lower for a second day. Here's the yield on the 10-year Treasury, which had broken down from a bear flag just before the FOMC meeting on Thursday, and now it has moved back up to the top of that flag, filling in that open gap in the process. It's been a long time since it has moved above that 50-day EMA in purple, and here it is testing it again. It will be interesting to see what the jobs report will do to it.
The April jobs report comes out Friday morning and estimates are looking for a gain of 200,000 jobs, an unemployment rate of 3.8%, and wage gains of 0.3%.
Earnings season is about 75% complete for S&P 500 stocks, and they have been fairly successful as far as the percentage that are beating estimates, but the next few quarters are still on the light side estimates growth-wise, and with this stock market at all-time highs you have to wonder if stocks are priced too optimistically at this point.
The S&P 500 (C-fund) was down modestly on Thursday but it battled back from some sharper morning losses by the close. It has fallen below a couple of the longer-term ascending support lines, technically breaking the rising ttend, but the 20-day EMA held it up yesterday.
A closer look shows that 2900 area did have some decent support after a brief breakdown.
The DWCPF (S-fund) had a decent day given what happened to the large caps. It didn't do as well as the Russell 2000 small caps index so the mid-caps in that fund were under-performing. This index has also broken some longer-term support.
A closer look at the S-fund shows the rising wedge breaking down despite the positive reversal yesterday. We'll have to see if the old support becomes resistance.
The Dow Transportation Index had a big day after a series of losses. It's back above the support lines that we have been watching, and technically it is still in good shape.
The EFA (I-fund) was down slightly as the dollar rallied for a second day but the I-fund return (which hasn't been posted yet as of this writing) will likely be worse because of the selling in U.S. stocks and jump in the dollar late on Wednesday, which wasn't priced into the I-fund yet on Wednesday.
The AGG (Bonds / F-fund) failed to hold a breakout on Wednesday thanks to the Fed's "transient" statement regarding inflation, and since then it has gone sharply lower. There is still support at the top of the bear flag and the bottom of that open gap.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the 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. Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
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[TD="align: center"] Daily TSP Funds Return
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There was a bit of a Fed hangover and we saw that in stocks but more particularly in the bond market where yields rallied again sending the F-fund lower for a second day. Here's the yield on the 10-year Treasury, which had broken down from a bear flag just before the FOMC meeting on Thursday, and now it has moved back up to the top of that flag, filling in that open gap in the process. It's been a long time since it has moved above that 50-day EMA in purple, and here it is testing it again. It will be interesting to see what the jobs report will do to it.
The April jobs report comes out Friday morning and estimates are looking for a gain of 200,000 jobs, an unemployment rate of 3.8%, and wage gains of 0.3%.
Earnings season is about 75% complete for S&P 500 stocks, and they have been fairly successful as far as the percentage that are beating estimates, but the next few quarters are still on the light side estimates growth-wise, and with this stock market at all-time highs you have to wonder if stocks are priced too optimistically at this point.
The S&P 500 (C-fund) was down modestly on Thursday but it battled back from some sharper morning losses by the close. It has fallen below a couple of the longer-term ascending support lines, technically breaking the rising ttend, but the 20-day EMA held it up yesterday.
A closer look shows that 2900 area did have some decent support after a brief breakdown.
The DWCPF (S-fund) had a decent day given what happened to the large caps. It didn't do as well as the Russell 2000 small caps index so the mid-caps in that fund were under-performing. This index has also broken some longer-term support.
A closer look at the S-fund shows the rising wedge breaking down despite the positive reversal yesterday. We'll have to see if the old support becomes resistance.
The Dow Transportation Index had a big day after a series of losses. It's back above the support lines that we have been watching, and technically it is still in good shape.
The EFA (I-fund) was down slightly as the dollar rallied for a second day but the I-fund return (which hasn't been posted yet as of this writing) will likely be worse because of the selling in U.S. stocks and jump in the dollar late on Wednesday, which wasn't priced into the I-fund yet on Wednesday.
The AGG (Bonds / F-fund) failed to hold a breakout on Wednesday thanks to the Fed's "transient" statement regarding inflation, and since then it has gone sharply lower. There is still support at the top of the bear flag and the bottom of that open gap.
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the 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. Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
