Jobs report

The dip buyers showed up again after a weak open on Thursday morning.  The Dow gained 20-points on the day, but the action was a little more impressive than that as it closed over 80-points off of the lows.

                                
For the TSP, the C-fund gained 0.25% yesterday, the S-fund was up 0.31%, the I-fund was down 0.80%, and the F-fund (bonds) lost 0.21%. 

This morning we get the January jobs report, and of course that could be a market mover should the numbers miss or beat the estimates.  They are looking for 148,000 new jobs and an unemployment rate of 9.5%. 

The S&P 500 remains in a strong trend but is closer to the top of the trading channels than the bottom.  It seems to continue to climb a wall of worry as many are anticipating a pullback.  We are seeing dips, but hardy anything that can be called a pullback.  I'm not saying I wouldn't try to step aside to try to miss a pullback myself at some point, but that has been a losing strategy for two months.  
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

A follow up on the bond yields shows us a possible break to the upside.  This is a bearish sign for the F-fund, but as with most breakouts, you want to see it hold above that breakout level for at least 3 days before calling it an official breakout.  There's also some resistance at the December high.

                        
                        Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The dollar had a nice rally yesterday, causing the I-fund (-0.80%) some problems, but if the recent downtrend is going to continue, the rally may have already run out of steam.

                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The breakdown from the 78.75 area would be the next upside target should it have enough strength to break the recent negative trading channel.  But that 78.75 should act as resistance on the way back up. Support, once broken, tends to become resistance.

The TSP Talk Sentiment Survey came in at 38% bullish, 45% bearish for a bulls to bears ratio of  0.84 to 1.  That is actually a fresh new buy signal (anything 1.25 to 1 or lower is a buy in a bull market).  So, the Sentiment Survey System's allocation will remain 100% S-Fund for next week.

Thanks for reading!  Have a great weekend!

Tom Crowley