TSP Talk Blog

Stocks rallied early on Thursday but the bulls have not had the enthusiasm that we have seen in previous months. Many of them must have taken "sell in May and go away" literally. On the other hand, the bears have had opportunities to really put some pressure on but their hearts don't seem to be in it after being burned so many times since the February lows. The Dow did end in positive territory at +9-points but most indices were basically flat. The one concern out there may be the Transports which had another bad day.

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Today (Friday) we get the April jobs report and estimates are looking for a gain of 207,000 jobs, and an unemployment rate of 5.0%. The Jobs Report Contest winner will be announced here.

Whether the market is looking for a string report to help the current weakening economic outlook, or a bad report to hold off the potential June rate hike, remains to be seen and the reaction on Friday may give us that answer.

The S&P 500 (C-Fund) held above the 50-day EMA for a second straight day which is a mildly bullish sign, but we tend to see these major EMA's hold on the first test. Having two successful tests tells us there is at least some willing buyers at this level.




The DWCPF (S-fund) lagged again and is also clinging to the hope that the 50-day EMA will hold as support gets very thin below that.




The Dow Transportation Index led the market on the way down last year. It led the rally from the lows in January, and is now it's flirting with another breakdown as it trades below the 50 and 200-day EMAs again. There is some support near 7600 but after that... not so much.




The EFA (I-Fund) remained below the 50-day EMA and the rising support line. These are certainly warning signs but this looks a little oversold in the short-term and it wouldn't be a surprise to see it move up to fill that open gap near 58.00 while retesting the 200-day EMA. After that, all bets are off.




The price of oil rallied early on Thursday but reversed hard to the downside falling back to the bottom of the rising wedge pattern. It did end with a 1% gain but this chart actually looks pretty bearish for oil.




The AGG (Bonds / F-fund) broke out to new highs finally, and with some authority. This still looks like a bullish chart for bonds, which means bond traders and investors are expecting lower interest rates, or at least don't expect them to go up soon. The jobs report could shake this up a bit.




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Thanks for reading. Have a great weekend!

Tom Crowley


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