TSP Talk Blog

3/08/13

After a strong open based on decent employment data, stocks traded in a very tight trading range on Thursday as investors await today's (Friday's) jobs report for February. The Dow gained 33-points on the day.

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The S&P 500 continues to cling to the bottom of the new resistance line, which was the old support line.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

We have now seen 3 closes above the intermediate-term resistance line. I like to give 3 to closes so that makes Friday's jobs report important for technical reasons. If we see a good report that keeps the index above the 1525 - 1530 area for the next couple of days, then we might expect that resistance line to become a support line.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

However, if the jobs report disappoints or sees a "sell the news" reaction either on Friday or Monday, and the S&P 500 drops below 1530 or so, then we might call this a failed breakout. Let's see what happens.

Rather than bore you with the normal indicators which have been telling us the same thing for some time now (overbought and too much bearishness out there), this New Highs / New Lows indicator shows that, despite the new high in the S&P 500 this week and a 52-week closing high yesterday (Thursday), we actually only saw about half the number of stocks making new highs than we saw a couple of days ago.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

History has shown that bull markets can last a long time rising on the backs of some leaders, but I guess I haven't seen which stocks are the leaders this time. It has been Apple for years, but Apple is almost 40% off of it's 52-week high. So what's leading? You would hope technology would be the leader but it seems like financials are outperforming the tech stocks. That brings up some question marks but as I said, the market can continue higher and milk the leaders for all they are worth before giving up.

Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

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