Stocks opened lower yesterday and moved tentatively on light volume for most of the day in front of today's jobs report, but managed to close well off of the lows.  By the close the Dow lost just 5-points after being down nearly 70 in early trading.

       

For the TSP, t

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

Often an important report like the jobs report, or announcement like a change in the Fed Funds Rate, will trigger a sharp move in stocks in one direction or the other, but will reverse course rather quickly.  I won't speculate on which way today's report will push the market but I would look for a good report to possibly create a "blow off" top rally that will be sold off in the coming days, or it could create a sharp decline that may need to be bought early next week.  The bottom line is I expect the market to shake things up and try to get investors to lean the wrong way.

I am really encouraged by how well the market has acted lately despite being overbought, despite the strong descending trendlines, and despite having been below the major moving averages, with the 50 EMA below the 200-day EMA. 

There are indicators that are giving me some concerns, but there always are.  My main concern right now is that I do not like to chase.  Markets don't go straight up or straight down, so I would prefer to wait and hope for a buyable pull back.
                         
Estimates for this morning's jobs report are for a loss of 87,000 jobs, with an unemployment rate of 9.6%.  Briefing.com broke it down even further showing estimates for jobs created in just the private sector at +83,000.

Update:  The July jobs report came in at a loss of 131,000 jobs, worse than expected.  The unemployment rate was 9.5%, slightly better than expected, and the private sector jobs added 71,000, slightly lower than expected. 

Also, I forgot to mention the TSP Talk Sentiment Survey which came in at 53% bulls, 33% bears for a 1.61 to ratio.  That keeps the system on a sell signal for next week, but with the 50-day EMA moving back above the 200-day EMA, the system has switched back to bull market rules.  That moves the buy signal ratio down to 1.24 to 1 or lower, and the sell signal to 2.0 to 1 or higher.  The 1.61 to 1 is neutral so we stick with the prior week's signal. 

Thanks for reading!  Have a great weekend!

Tom Crowley