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Stocks mixed into jobs report

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Stocks opened higher Thursday but the rest of the day played out like Tale of two Cities. The Dow gained a solid 68-points, mainly because the price of oil rallied, but the Nasdaq got hit hard again. I read that it was the first time that the Dow was positive and the Nasdaq had dropped 1% or more for two days in a row since December 2000. Meanwhile the Transports were up solidly again.

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The November jobs report is being released this morning (Friday) and estimates are looking for a gain of 180,000 jobs and the unemployment rate to remain 4.9%.


The jobs report may be the catalyst that turns this market back around, but it is a little early in December for the Santa Claus rally to start so perhaps the recent weakness is suggesting an unfavorable report. Of course we have to ask, what is unfavorable? We used to see strong reports as a reason for the Fed to hike rates so stocks didn't embrace good reports. But now that a rate hike on the 14th this month is all but inevitable, it may be a different story.

I just don't know and seasonality may possibly continue to drive the market the rest of the month. See the December seasonality chart toward the bottom of the commentary page page The Santa Claus rally generally starts mid-month or slightly later. But let's not get too overconfident about December. Last year all of the TSP stocks funds were down between 1.6% and 3.9% during the last month of the year.

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The SPY (S&P 500 / C-fund) has now clearly broken its short-term rising trend but the 218 area could be in play as an area of decent support, unless the jobs report really disappoints. Notice the PMO indicator rolling over.




The DWCPF (small caps / S-fund) was hit with solid losses for a second day and has actually been down four days in a row. There's a little more room for this to fall before it hits support.




The Nasdaq 100 lost another 1.6% yesterday and there's one rising support line sitting between it and another test of the 200-day EMA. Interesting action with the Dow up the last two days.




Oil shot up again as supply is going to be cut, so it makes some sense, but it did back off from the recent highs which is the top of its range this year.




The EFA (I-fund) was down again and continues to fill in a bear flag.




The High Yield Corporate Bonds fund may be forming a bull flag, which tend to break to the upside, but closing at the lows yesterday below the flag is a little dicey. It could be in the right shoulder of an inverted head and shoulders pattern, but it needs more time to form.




The AGG (bonds / F-fund) broke down from its bear flag making a lower low, although it did close off the low so there were some interested buyers in the afternoon. Not a great looking chart but quite oversold and the jobs report could trigger something here.




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Thanks for reading. Have a great weekend!

Tom Crowley


Posted daily at www.tsptalk.com/comments.php


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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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