The Dow closed down 11-points yesterday but stocks were mostly higher on
the day as the S&P 500, Nasdaq, small caps, and I-fund stocks all posted
modest gains.
For the TSP, the C-fund gained 0.12% yesterday, the S-fund was up
0.35%, the I-fund
made 0.25%, and the F-fund (bonds) picked up 0.08%.
I am often asked
if it is difficult to come up with something to talk about every day and
almost invariably the answer is, no. There always seems to be
something going on that is worth writing about, but I have to admit this
type of market does not make it easy.
The rally has been relentless and I can hear the frustration from some of our
message board members who are missing out. They want to know if they
should just buy here because they are sick of missing out on the gains.
The market loves this game. It wants nothing more than to get you to
give up and buy the runaway market, just in time to trap you and then pull
back.
Our Sentiment Survey
shows me that, despite the relentless gains, many of us are on the sidelines
expected a pullback. The bulls (50%) to bears (42%) ratio of 1.19 to 1
is again low enough to trigger a fresh buy signal. That's 3 buy signals
in a row and 4 in the last 5 weeks. I am guessing that we won't see
any significant sell-off until more of us give up waiting and that ratio
gets much closer to 2 to 1.
The ironic part is that since the bulls to bear ratio is in our buy area,
the market could still go higher. I hate to chase any market but when
the bearish percentage is this high, and the ratio is this low, that's a
pretty good indication that there is still some fuel for this rally.
After all, the bears are the fuel to a market rally as they are the one who
are doing the buying now. The bulls have already dome their buying.
Anyway, here is the chart. Nothing much has changed...
The last 8
Fridays when the Nonfarm Payroll report was released have opened
mixed, but all closed lower than the day before.
If you bought at the open on every Nonfarm Payroll day and sold
at the close, you wouldn't have had a +1% gain since way back in
September 2009. The last 28 have all shown either a loss or
small gain.
There have been 14 times the S&P was sitting at a six-month high
the day before a Nonfarm Payroll report since 1997.
There was a modestly positive bias the day of and after the
report, with the S&P up 63% of the time. For the rest of the
month, it was positive 52% of the time, with an average return
of -0.7%, average drawdown of -2.2% and average maximum gain of
+2.0%. Pretty mixed.
There were only two times it happened on the February release,
in 2007 and 2011. Both times, stocks gravitated modestly higher
for the next couple of weeks, then started to crack near the end
of the month, erasing the entire year's gain up to that point.
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