TSP Talk Blog

05/03/13

Stocks rallied strongly on Thursday as volatility continues and the Dow posted another triple digit move. Yesterday it was a 131-point gain, which followed Wednesday's 139-point decline.

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Today we get the jobs report so there is a good chance the market could see another big move, but which direction - we don't know.

The S&P 500 is back testing the recent all-time highs as it consolidates and digests the late April rally. Volume was quite a bit lighter during Thursday's rally compared to Wednesday's sell-off volume.


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

The Nasdaq made new highs but it is now testing the top of its trading channel. This leader gives hope that the S&P 500 will follow, but as we've mentioned several times, the leading small caps and the Transportation Index are not making new highs, but instead lower highs.


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

The dollar rallied yesterday but only enough to push the UUP up to the bottom of the recent support line. Support, once broken can act as resistance, unless it was a "fake-out" move.


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

The April jobs report will be released this morning (Friday). Consensus estimates are in the area of adding 155,000 jobs, and an unemployment rate of 7.6%. The ironic situation that the market has been in over the last couple of years is that a weak jobs report may give an initial negative reaction to stocks, but since a weak report means the Fed has no reason to stop their money flow, it may be a positive overall for the market. On the other hand a very strong report, which would indicate an improvement in the economy, would give the Fed a reason to back off of the money pumping, thus the stock market may not be too happy.

Update: 165,000 jobs added in April. Unemployment rate was 7.5%

Thanks for reading! Have a great weekend!

Tom Crowley


Posted daily at TSP Talk Market Commentary

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