A test
Stocks
fell yesterday on a weaker than expected ADP employment report, and
investors were worried that it could be a prelude to a lower than
expected jobs report for March, which comes out on Friday. The Dow
was down 50-points.
For the TSP funds, the C-fund lost 0.33%, the S-fund
was down 0.52%, and the I-fund managed a 0.17% gain after the dollar
fell 0.5%. The F-fund
added 0.13%.
The S&P 500 has moved sideways for the last 7 trading
days, and it is now about to run into the bottom of the ascending
trading channel. Trading at 1169, the next levels of support are
nearly upon it: 1165 (rising support), 1155 (20-day EMA), and 1150 (January highs).
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
There is other
evidence that could lead us to believe of that a breakdown of that
support is possible. For on thing, bonds are starting to look like
they are due for a bounce.
Bond yields made a double top
last week and started to pull back from that level. Remember, when
yields go down, bond prices (and the F-fund) go up.
There is a huge open gap near 3.68%, and that coincides with a rising
support line, so that would be my approximate target for a pullback in
the yield of the 10 Year T-Note.
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
Bond yields tend to move down (and bond prices move up) when the stock
market gets a little spooked as investors look for some safety.
The dollar is also back at the rising support line and the 20-day EMA,
and a rally off of support is possible here. As we know, stock
prices tend to have a more difficult time moving higher when the dollar
rallies, particularly the I-fund.
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
Of course the dollar could
break that support, bond yields could move up instead of down, and stock
prices could bounce off of the rising support line and start a new leg
higher. The market is technically in a good position, but I just
wanted to mention that there are some signs that all may not be as
positive as they appear on the S&P 500 chart.
According to
briefing.com,
after losing 36,000 in February, the consensus estimates for March's
jobs report are for a gain of 190,000 jobs, but the estimate range is
quite wide. briefing.com's own estimate is for "just" 75,000 jobs
being added, a good solid number, but it will be very interesting to see
if the number is less than 100,000 or closer to +200,000. The
market will likely react sharply one way or the other depending on which
end of the range the actual number comes in.
Don't forget, you won't be able to make an interfund transfer on Friday
morning. Well, you can, but it won't take affect until close of
business on Monday.
Chart provided courtesy of www.sentimentrader.com
Thanks for reading. I probably will not be updating the commentary
for Friday since there will not be any trading. Have a great
Easter weekend, and a belated Happy Passover to our Jewish friends.
Tom Crowley
|
