TSP Talk Blog

The jobs report came in at +242,000 on Friday, with an unemployment rate of 4.9%. That was strong enough to thwart recessionary concerns, but probably not too strong to get the Fed back to raising rates. The embraced the results and the Dow gained 63-points. The recent decline in the dollar helped the I-fund lead the way.

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Oil continued its recent rally and is making a bid to make the recent lows, hold as the lows, and that has helped stocks with their strong rebound. It's now or never for the oil bears.

The S&P 500 (C-Fund) jumped over the 200-day EMA after the jobs report on Friday, but settled down below it when stocks faded slightly into the close. It closed just below the 200-day EMA and the rising wedge is still in play as the index closed just below its resistance line. There is still a small open gap near 2030 that could be getting some attention.




The weekly chart shows the S&P 500's three week rally now testing the 50-week EMA.




The Dow, and other indices, looks to have created a large head and shoulders pattern, but it has broken above the right shoulder and may be making a test of the head. Not the most common outcome on an H&S, but it is not that unusual either.




The Nasdaq 100 (QQQ) is also testing its 200-day EMA and has been held short for four straight days. It looks like a good place for a healthy pullback, but the bulls still have momentum in the other indices so we'll see if that is enough to pull this one above resistance.




The price of oil made a definitive move above the resistance line of the rising wedge pattern and has improved its technical picture greatly recently. If the bears want to push this down again they may be running out of time because there may not be much more resistance until it hits the 200-day EMA (~43).




I posted this Election Year chart at the beginning of the year and so far it hasn't been off all that much. The average election year starts with some weakness before bottoming in early to mid-February, then it rallies into April before peaking again and falling hard.




Well, so far we have seen the weak start and a low made in early to mid February, followed by a strong rally into March. Something tells me we will be revisiting the above chart again in the near future.




Bonds were down on Friday and yields popped up toward their 50-day EMA. I still think this could be a bear flag for bond yields, which could be bullish for bond prices and the F-fund should it break down as bear flags tend to do.




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

Tom Crowley


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