Stocks rallied on Thursday, and Friday was a day off for the market, but that didn't stop the jobs report from triggering an early sell-off in the futures market while they were open briefly. The Dow was up 65-points Thursday, but with the payrolls numbers coming in at about half of what was expected, it took away those gains and then some. The only question now is, how much of that will rollover into Monday morning.
[TABLE="align: center"]
[TR]
[TD="align: center"]
[TD="align: center"][/TD]
[TD="align: center"] Daily TSP Funds Return
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As I said the futures were only open for a short period of time after the jobs report was announced so much of the selling could have been emotional and we should get a better indication what that means on Monday when cooler heads prevail. After all, doesn't a weak economic report mean the Fed is less likely to raise rates, and isn't that what has been the catalyst for the market for years?
The I-fund had a nice day on Thursday with the dollar falling again, and bonds were down. But again, all of that may be reversed by the reaction to the jobs report. The early indications from the futures on Sunday night show a little bit of a bounce-back, but not much.
It's another one of those days where the analysis isn't going to be all that helpful because all of these stocks chart below would have nasty downside bars if the stock market had been open on Friday.
The SPY (S&P 500 / C-fund) popped back near the 50-day EMA on Thursday but it looks like that red rising support line could be tested early today.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The weekly chart shows that the long-term rising support line may be tested for a third straight week, and that would be 4 in the last 5-weeks. The pressure has been put on by the bears who are trying to crack this thing to the downside. They have tried many times in the last few years with only one successful breakdown, but it has been flirting several times this year alone, and you can see that is a lot different that what we saw in 2013 and 2014.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) has been holding up well as the rising dollar hasn't been impacting them as much as it has the larger stocks. There is a possible rising wedge forming and that could turn out to be trouble, but there is still room above if it wants to go higher first.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Dow transportation Index may be the canary in the coal mine as it has lagged badly, and the weak jobs report may be explaining why this economically sensitive index has been lagging. The 200-day EMA and the prior lows are being tested now and that doesn't include what may happen if stocks open sharply lower today as the futures may be telling us.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) bounced back late last week but you can see that the gaps on this chart make it look like a piece of Swiss cheese. It can justifiably go either way to fill an open gap in the short-term without giving us a clue as to which way it may ultimately go. The fact that it is above the 50-day EMA and the support line, which is rising, has me leaning toward the bullish side.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Good Friday performance chart shows potential trouble today Monday 4/6, and that certainly looks like a good possibility, at least to start the day today. But then things get a lot better for a few days.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The AGG (Bonds / F-fund) pulled back on Thursday but that may be meaningless if stocks sell-off on Monday morning as investor may plow right back into bonds stock don't recover.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the Sentiment Survey Results and 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! Because the stock market and the TSP are closed on Friday, there won't be any updated commentary. Have a great weekend and Happy Easter!
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.
