TSP Talk Blog

Yesterday's "sinko" de mayo continued this market's recent choppy personality as we seem to be going back and forth and Tuesday was one of those back days with the Dow losing 142-points. It has been one or two steps forward, then one or two back. On the bright side, support continues to rise in the S&P and we haven't had more than two consecutive down days since March. So while it hasn't been overly bullish action, if you step back and look, the trend is up - at least in the large caps. Small caps are another story.

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The S-fund continues to lag and the I-fund got a little help from the weak dollar. The F-fund fell again.

The April Jobs Report comes out on Friday morning and estimates are looking for a gain of 215,000 jobs and an unemployment rate of 5.4%. The Jobs Report Contest is open in the forum. Click here for more information.

The SPY (S&P 500 / C-fund) has once again been pushed back from any breakout attempt and it feels like investors are becoming increasingly impatient with this market despite the S&P posting its second highest intraday price just two days ago. Whether their concerns are justified or if this market does what it has done for several years now, which is to swat away the fears and rise to new highs, remains to be seen. It remains in a rising trend above the 50-day EMA, but testing them both now.


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

The Wilshire 4500 (S-fund) made a lower low on Tuesday after a brief recapturing of the 50-day EMA on Monday. The short-term trend is now down, but the larger trend remains up. Dip or correction? That is the question.


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

The EFA (EAFE index / I-fund) finally did what we have been fearing. That is, it broke to the downside of its rising wedge formation. That's what rising wedges tend to do, but it had thrown us a brief optimistic curveball when it broke to the upside in April, but that turned out to be a fake out.


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

Pulling back a bit and you can see that yesterday's selling took the EFA to the longer-term support line so this area is quite important.


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

The dollar has been helping the EFA / I-fund, and while that didn't mean they were up, but they took much less of a hit compared to the U.S. indices and that's because of the falling dollar.


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

The AGG (bonds / F-fund) continue to slide and is getting closer to a longer term support line that could be make or break for the bonds bull market. It seems like we've said that many times over the years but bond have always bounced back. Let's see how the AGG handles that 109.75 support area before deciding.


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

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Thanks for reading! We'll see you back here tomorrow.

Tom Crowley


Posted daily at TSP Talk Market Commentary

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