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Flat action infront of jobs report

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It was another day of mixed action with the Dow dipping 6-points on Thursday and the small caps lagging again on the downside, while the S&P 500 and Nasdaq rallied back from early losses to close just north of break-even.

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The new healthcare bill was passed in the House of Representatives but there wasn't much of a reaction on Wall Street which begs the question, what is Wall Street waiting for, and what's keeping it up despite some weak signs from the economy?

Oil plummeted again on Thursday losing almost 5% and falling to a 5-month low. Remember a few months ago when the market was bouncing in unison with the price of oil? Today no one seems to care about it despite it being 17% off of the 2017 highs.

The run-off French election is this Sunday, and while the market was concerned during the first round, it seems to have dismissed it now, I guess assuming Macron will will. Will there be a sell the news reaction on Monday? And if Le Pen actually pulls off an upset, it could be the end of the Euro currency and the markets will freak out.

Perhaps stocks are remaining buoyant because North Korea hasn't been front page news this week.

Whatever it is, the bulls are not being scared away right now, but they haven't yet been able to push the S&P into new high territory just yet. Perhaps the jobs report will do it?

We get the April Jobs Report this morning (Friday) and estimates are looking for a gain of 180,000 jobs and an unemployment rate of 4.6%.


The S&P 500 / C-fund has spent the last 7 or 8 days trading inside the bull flag after the post French election flag pole rally. The two gaps remain open from that rally so the lure of the gaps just hasn't been there for some reason. The small caps were a different story.




The DWCPF (S-fund) did fill its open gaps with the lower one being filled yesterday. The index was down sharply before hitting and holding at the 50-day EMA, then rebounding hard despite the modest losses on the day.




The EFA (EAFE Index / I-fund) did the least expected move by moving above it rising trading channel, and away from that that huge post French election open gap.




The price of oil fell 4.8% yesterday hitting a 5-month low. This is as we head into the heaviest driving season of the year and we normally see prices increase. Oil is an economically sensitive commodity so the questions are arising about the nature of this decline.




Not only oil, but as we mentioned the other day, other economically sensitive commodities are also falling like copper, which is now holding above the precipice of the 200-day EMA...




And silver, which is a heavily used industrial material, is fading and down about 13% in just a few weeks.




This chart is a commodity ETN and it shows weakness of a basket of commodities and we have to wonder if this is giving us any clues to the strength of the economy.




The AGG (Bonds / F-fund) closed higher that it opened, but it still broke down from that bear flag that we've been watching.




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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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