TSP Talk Blog

It was a slow, mixed day for stocks, but they mostly trended higher after a slightly negative open. The Dow lost 79-points while the broader S&P 500 was flat, and the Nasdaq gained 0.25%. Small caps were off modestly, as were the Transports, but both held onto most of Monday's gains and it was just a day of rest for the bulls.

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The stock market held onto most of its gains from Friday and Monday's rally but the momentum took a break and some weakness in yields may have been the culprit. The yield on the 10-year fell to 2.48% and so far it has not been able to move higher than the top of the open gap created several days ago, and filled on Monday. That 2.50% area looks like it could be tough to crack.




A longer term view (click image to see full chart) shows other gaps on the chart with the red being gap already filled, and the blue ones still open and yet to be filled. There's open gaps above and below the current level, but with the current trend being down, I suspect the large open gap near 2.25% may be the most likely to be filled next.


Click on image to enlarge


We get the March Jobs report on Friday and estimates are looking for a gain of 170,000 jobs, an unemployment rate of 3.8%, and wage growth at +0.2%.

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The S&P 500 (C-fund) made a slightly higher high on the day but it was mostly a day of rest after the 2-3 day rally. There's an open gap at last Friday's highs and that a possible pullback target, with the top of that blue wedge being a possible upside target for now.




The DWCPF (S-fund) was down slightly as it stalled again at the descending resistance line.




The Financials also dipped as they play the yield game. The XLF closed off its highs creating a small negative reversal on the chart, and as you can see, sometimes that can put a short term lid on the upside.




The EFA (I-fund) was fairly flat as it battled the dollar's reach toward another new high, but...




... the dollar closed well off its high and that could also be a short-term turning point as we've seen before.




Despite the strength in the dollar, the price of oil continues to rally and it is now 50% above those late December lows. Consumers are likely feeling the difference at the gas pumps and if this trend continues we could see it negatively impact their spending.




The AGG (F-fund) was up slightly on the dip in yields, although that large open gap still looms and could be a target. The trend in the 10-year yield is still down however, and that keeps this AGG in play.




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

Tom Crowley


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