Jobs report gives no relief
Stocks opened higher on Friday after the release of the June jobs
report, but slid throughout the the morning, and after an attempt at an
afternoon rally, a late day sell-off kept he indices in negative
territory. The Dow closed down 46-points
on the day.
The major indices have now been down 9 of the last 10 days.
For the TSP, the C-fund
lost 0.46%, the S-fund dropped 0.81%, and the I
fund gained 0.15% as the dollar continues to slide. The F-fund (bonds)
fell 0.14%.
For more on the weekly and monthly returns, please see our
TSP Weekly Wrap-up.
The S&P 500 continues to trade below the major support near 1040, and
below the major moving averages. While it is due for a bounce in
the short-term, the technical damage is a warning that the trend and
outlook have become negative. While market crashes are rare, they
do tend to come from situations such as this.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
The head and shoulders pattern (H&S) we have been watching broke
last week and as you can see below, whether upright or inverse, broken
H&S patterns do tend to portend big moves in the direction of the break.
H&S labeled "A" is more of a "Quasimodo" H&S (I made that up) as the
right shoulder was a bit too large to be an official H&S, but it had the
same results. The Inverse H&S (C) in late '08 / early '09 was a bullish
pattern that preceded the explosive 2009 rally.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
The dollar has been pulling back for the last month. It broke
below the 20 and 50-day EMA's and is now flirting with the longer-term
support line near 84. We may have ourselves another head and
shoulders pattern, which could mean a top is in, but we'll have to see
if that support holds.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP
Talk
This is important to us in that the I-fund, which has been down, has
been outperforming the C and S fund over the last several weeks.
Something to consider if you are deciding on a stock fund.
For me, I may take a shot at a short-term rally at some point, but it
would be a gamble as stocks are now trying to swim against the current.
Thanks for reading. We'll see you back here tomorrow!
Tom Crowley
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