Stocks opened higher higher on Wednesday, but we came into the day after Tuesday's negative reversal day, so we anticipated some kind of attempt from the bears to follow through on the downside at some point during the day. They did so by selling the opening gains, and again selling into the close, after a midday rebound. The Dow ended the day down 218-points, which was near the lows of the day. Oil and bonds were down on the day.
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We did get an ADP employment report which is a head's up to Friday's April jobs report, and it showed a loss of 20.2 million jobs. I never thought I'd write that. The fact that stocks were holding up fairly well for most of the day could be attributed to the fact that most people knew it was coming, and it came in about 250K lower than expected. What surprised me was to see bond yields rallied (bond prices down) on the day - a day with the worst employment numbers that we have seen, maybe ever.
Friday's jobs report is expecting a loss of 21 million jobs in the month, and an unemployment rate over 16%, and that report may get more attention, even though it will be a bit redundant.
We get a new initial jobless claims numbers this morning and they are looking for 2.9 million new weekly claims. That's about half of last week's number but we didn't expect this to keep jumping higher at the same pace.
I noticed something yesterday while going through the CNBC website. Despite it being a financial website, at one point yesterday they seem to be pushing the negative coronavirus stories on their site for some reason. I'd say more than 70% of the articles were related to the virus. I thought it was odd.
We are seeing some signs of attempts to reopen the economy, even if slowly, but the media is pounding the negative side again, similar to the March headlines which were relentless and scared the hell out of investors. I'm not sure what's up, but it's just an observation. It didn't turn out well for the stock market in March.
The S&P 500 (C-fund) is holding up but struggling to advance above that 200-day EMA which it failed at last week. It actually closed about where it closed on April 14, or more than three weeks ago, and consolidating isn't normally a bad thing, but there is a lot of overhead resistance on the chart. The 20 and 50-day EMA are still below, and that's a good thing.
A closer look shows that both gaps that were opened recently, have now been filled - one on the upside, and one on the downside - and the only open gaps (red) on the chart since the March 23 lows, are quite a bit below the current level.
The DWCPF / S-fund was down slightly yesterday and continues to hold above the key 50-day EMA and inside the rising trading channel (red), but it is still below that broken rising support line (blue), which is a minor red flag.
Despite the very weak employment data, the yield on the 10-year Treasury was up quite a bit on Wednesday. Yields tend to move up on stronger economic data.
That makes the losses in the financial stocks yesterday a little curious. Being below the 20 and 50 EMAs, and the rising support line, this chart isn't looking very bullish at all, and is actually troublesome.
The BND / F-fund was down sharply, and as I mentioned above that seemed rather curious on a day with the miserable employment data, although the data was slightly better than expected. The decline pulled it back to what looks like the bottom of a bullish flag for bonds. However, technical analysis on the bond charts isn't always predictable.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Thanks for reading. Well see you back here tomorrow.
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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We did get an ADP employment report which is a head's up to Friday's April jobs report, and it showed a loss of 20.2 million jobs. I never thought I'd write that. The fact that stocks were holding up fairly well for most of the day could be attributed to the fact that most people knew it was coming, and it came in about 250K lower than expected. What surprised me was to see bond yields rallied (bond prices down) on the day - a day with the worst employment numbers that we have seen, maybe ever.
Friday's jobs report is expecting a loss of 21 million jobs in the month, and an unemployment rate over 16%, and that report may get more attention, even though it will be a bit redundant.
We get a new initial jobless claims numbers this morning and they are looking for 2.9 million new weekly claims. That's about half of last week's number but we didn't expect this to keep jumping higher at the same pace.
I noticed something yesterday while going through the CNBC website. Despite it being a financial website, at one point yesterday they seem to be pushing the negative coronavirus stories on their site for some reason. I'd say more than 70% of the articles were related to the virus. I thought it was odd.
We are seeing some signs of attempts to reopen the economy, even if slowly, but the media is pounding the negative side again, similar to the March headlines which were relentless and scared the hell out of investors. I'm not sure what's up, but it's just an observation. It didn't turn out well for the stock market in March.
The S&P 500 (C-fund) is holding up but struggling to advance above that 200-day EMA which it failed at last week. It actually closed about where it closed on April 14, or more than three weeks ago, and consolidating isn't normally a bad thing, but there is a lot of overhead resistance on the chart. The 20 and 50-day EMA are still below, and that's a good thing.
A closer look shows that both gaps that were opened recently, have now been filled - one on the upside, and one on the downside - and the only open gaps (red) on the chart since the March 23 lows, are quite a bit below the current level.
The DWCPF / S-fund was down slightly yesterday and continues to hold above the key 50-day EMA and inside the rising trading channel (red), but it is still below that broken rising support line (blue), which is a minor red flag.
Despite the very weak employment data, the yield on the 10-year Treasury was up quite a bit on Wednesday. Yields tend to move up on stronger economic data.
That makes the losses in the financial stocks yesterday a little curious. Being below the 20 and 50 EMAs, and the rising support line, this chart isn't looking very bullish at all, and is actually troublesome.
The BND / F-fund was down sharply, and as I mentioned above that seemed rather curious on a day with the miserable employment data, although the data was slightly better than expected. The decline pulled it back to what looks like the bottom of a bullish flag for bonds. However, technical analysis on the bond charts isn't always predictable.
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
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Thanks for reading. Well see you back here tomorrow.
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.
