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Update: Nonfarm payrolls rose by 39,000 last month as private-sector employers added only 50,000 jobs, the Labor Department said Friday. Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 144,000 and that the jobless rate would remain unchanged at 9.6%. More Follow-through Stocks rallied again yesterday, as the rebound off of the 50-day EMA continued. Buyers showed up early, and kept the pressure on the bears all day. By the close, the Dow had gained 106-points.  Today, the rally meets the November jobs report. For the TSP, the C-fund gained another 1.28% on Thursday, the S-fund was up 1.15%, the I-fund jumped 1.89%, while the F-fund (bonds) fell 0.11%. The S&P 500 is now firmly back in the ascending trading channel. The move above 1200 creates a strong support level just under 1175, and of course we want to see the lower end of the trading channel hold. Today that level would be in the area just above 1200.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Yesterday I mentioned the breakout in the market leader - Dow Transportation Index. The other big leader, the Nasdaq, has not quite made the leap to a new high, but our #3 leader, the small caps, have also broken out. This is good news for the followers - The Dow and S&P 500.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk We know how important the direction of the dollar is to the stock market, and any rally in stocks will be assisted by weakness in the dollar. At least that has been the case for the last couple of years. This inverse correlation is not always as pronounced as we have been seeing it, but right now it is almost directly, inversely, related. I've posted this head and shoulders (H&S) breakdown pattern before, and what it is basically saying is that once an H&S breaks below the neckline, there is usually a rally back to the neckline before the downside continues.  The recent rally in the dollar may have just completed this test, as this week's pullback has started in the area of the neckline and the 200-day simple MA. This really puts pressure on the dollar in the near term, and that should be good news for the stock market.  Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk I did a little chasing this week in my TSP account, using 2 IFT's already, although I almost cancelled the one I did yesterday after the market was up about 100-points near the transaction deadline, but I decided to let go through. I may regret that, but I would actually welcome a jobs report triggered pullback today as I still have a lot of cash sitting in my IRA that I want to put back to work. I kept waiting for some weakness yesterday and Wednesday to do some buying, but it never happened. The TSP Talk Sentiment Survey came in at 59% bulls, 31% bears, for a bulls to bears ratio of 1.90 to 1. That's close, but it did not quite hit the 2.0 to 1 sell signal. That means the System remains on a buy signal and 100% S-fund allocation for next week. The system's return for 2010 is now +29.74%. Thanks for reading! Boy, the week sure went by quickly. Have a great weekend.
Tom Crowley |
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