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Flat day before jobs report

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Stocks were flat on Thursday but for the first time in a few days they rallied off their intraday lows to close strongly. The Dow gained 2-points. The indices are finding some support at key levels that must continue to hold or we could see another leg lower.

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Small caps lagged while the price of oil and bonds were again the victims of selling on Thursday as we see more technical breakdowns in those charts.

The February non-farm payrolls jobs report comes out this morning (Friday) and estimates are looking for a gain of 188,000 jobs and an unemployment rate of 4.7%. Clearly these jobs reports are capable of setting the tone for the day and into next week, but sometimes traders fade the initial move so it is difficult to know whether to buy a good report or sell a bad report. It could all reverse next week.

The SPY (S&P 500 / C-fund) fell toward its 20-day EMA and found some relief as the indices close off those lows. It looks like a classic buying opportunity in a bull market, but this has been quite a rally that may need more digesting before resuming up to new highs. We'll see.

The DWCPF (S-fund) fell through the 50-day EMA yesterday and closed slightly below it. That's a little surprising as the index seems to have reversed on a dime since the Trump speech to congress last week.

The Dow Transportation Index also fell through the important 50-day EMA on Thursday after holding for one day on Wednesday's test. There's more support neat 9100 that may be more important for the intermediate-term call.

The price of oil fell another 2% yesterday, temporarily falling below the important 200-day EMA before bounding back above it. This looks similar to the decline before the election, and of course after the election, oil rallied with everything else.

The EFA (I-fund) was up modestly on Thursday and has been hovering near the recent highs. It seems even the overseas markets are waiting on the Fed and the debt ceiling too.

The AGG (bonds / F-fund) fell again on Thursday as investors unload bonds and bond yields rise. The Fed's potential interest rate hike seems to be baked in already.

Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to:

Thanks for reading. Have a great weekend!

Tom Crowley

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S&P 500 (C Fund)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)