TSP Talk Blog

It was a busy week on Wall Street last week, culminating with a double dose of inauspicious news after we learned of the airstrike in Syria and got the March jobs report which came in much lighter than expected. Still, the market held up well in the face of this, and it took a late move lower to push the indices from modest gains to slight losses. The Dow ended the day down 7-points.

Daily TSP Funds Return More returns

The March jobs report came in with a gain of 98,000 jobs, about 80,000 less than expected. The unemployment rate came lower than expected too at 4.5%.

After the ADP payroll report last Wednesday, which sent stocks higher, we might have thought that even a jobs report meeting estimates might send stocks lower, but it came in much lower yet stocks held up.

On top of that the airstrikes on Thursday night send the futures market tumbling and it looked like it was going to be a bad day for the market, but instead stocks opened slightly higher on Friday morning.

It seems reasonable to believe the market is in decent shape if it was able to hold up, going into a weekend, with all the geological uncertainty. But technically the charts are hitting some roadblocks which should be the test to start the new week.

The price of oil was up sharply early Friday as turmoil in the Middle East tends to do, but it settled down a bit by the close. The chart has improved greatly and this rally in energy has been a catalyst for some of the major stocks in the large cap indices, particularly the market leading Transportation Index.




The other major development for the financial community was a breakdown in the 10-year Treasury Note which fell below 2.3% for the first time since last November. However, it reversed higher and closed back above 2.3% and that could be a low in yields as it oscillates between 2.3% and 2.6%. That may be a bad sign for the bond market this week unless we see more geopolitical disruption, which is possible with eyes on Syria and North Korea.




The SPY (S&P 500 / C-fund) has been hugging the 20-day EMA for almost two weeks now, and it has had a difficult time getting above some overhead resistance. I still think that could be a bull flag, but it needs to breakout soon or it will become too long to be an effective formation.




The weekly chart is sitting back atop of that old resistance line and still in that large bull flag.




The DWCPF (S-fund) is also dancing near the 20 and 50-day EMAs and closed Friday below a key level, the top of the descending trading channel, that could be resolved this week, but to which side remains to be seen. That channel could easily hold and push it back to the bottom, if it cannot breakout soon.




The Dow Transportation Index has been hanging out just below the 50-day EMA for weeks and while that is usually a negative, the bears have been unable to push it lower at this obvious resistance. The rally in the price of oil has helped and could determine which side of that resistance we end up on by the end of the week.




The EFA (I-fund) fell below the 20-day EMA for the first time in a while but remains inside the rising trading channel.




The dollar has been rallying putting some pressure of the I-fund, but it also shows the strength in the price oil since a rising dollar normally puts pressure on oil.




The AGG (Bonds / F-fund) was up on the airstrikes and jobs report early, but it reversed and created an negative outside reversal day. Is this a short-term top for bonds? It looks like it could be.




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: www.tsptalk.com/plus.php

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

Tom Crowley


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

The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.