TSP Talk Blog

Stocks were mixed but mostly higher on Thursday as the Dow gained 23-points. The problem with the action was that the Dow was up 199-points during early trading. The Nasdaq closed down as the big tech stocks that had been leading the bull market during the first half of the year, lagged.

They call them "FANG" for Facebook, Amazon, Netflix, and Google, and one thing that a bear market usually does is create a different group of leaders when the bear market is over. We shall see.

We're still under pre-holiday rules and what we see happening in the last couple of days could be a smoke screen. Next week volume will pick up and money managers will be more engaged, although summer vacations tend to go into next week as well.

We get the August jobs report before today's (Friday) open and consensus estimates are looking for a gain of 217,000 jobs, and an unemployment rate of 5.2%. The Jobs Report Contest winner will be posted here.

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The gains in the stock market were muted after some big early gains. Bonds were up.

The SPY (S&P 500 / C-fund) filled the overhead gap on Thursday and we knew that could be an upside target after Tuesday's gap down, but now that leaves the chart a little vulnerable. There are arguments for both sides, as there always are, but with volatility high we can't rule out a retest of the lows so I wouldn't get overly aggressive here. The ones who take the biggest risk could make the biggest score, or they could regret it.


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

The Dow Completion Index (S-Fund) also filled the overhead gap but then created a negative reversal day.


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

The market leading Dow Transportation Index, which has been warning us about a bear market for months, looks to be creating another possible bear flag. It's not official yet. It still has a chance to make a "V" bottom, but it needs to get above the 50-day EMA or we'll likely see another push toward the lows.


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

The QQQ (Nasdaq 100) failed at the 200-day EMA several days ago and it may be trying again. The upside reversal has been explosive but here's where the market gets tested. There is a small gap above the 200-day EMA that may warrant some attention, and that is actually closer to the 200-day SMA (simple moving average) so it's possible we could get a fill, but it's all resistance so be careful.


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

The AGG (bonds / F-fund) was up on Thursday but the bear flag remains. The jobs report may provide the catalyst for a breakdown, or a rally off of support, but something tells me that the 8-day consolidation may be about over.


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


Per www.tsp.gov: "Some financial markets will be closed on Monday, September 7th in observance of the Labor Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (September 7th) will be processed Tuesday night (September 8th), at Tuesday's closing share prices."

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Thanks for reading. Have a great holiday weekend!



Tom Crowley


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