TSP Talk – Jobs and Earnings

The stock market became tentative before Friday’s jobs report, and with good reason.

For the TSP, the C-fund lost 0.67% last week, the S-fund lost 1.06%, the I-fund dropped 2.79%, while the F-fund (bonds) gained 0.09% and the G-fund was up 0.02%.

The S&P 500 has been testing and so far holding the 20-day EMA, but the more investors let it knock on that door (4 X in the last 10 days), the more likely it is going to fall through.

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

That is an easy analysis since we saw that the jobs report came in much lighter than expected on Friday, and with the markets being closed, we should expect a negative reaction on Monday morning. The futures market certainly thinks so as they were trading when the report came out and the Dow futures were down about 120 early Friday.

The 50-day EMA and the longer-term rising support line may be the next test for the S&P 500.

According to sentimenTrader.com:

When the S&P 500 has declined three days in a row from a 52-week high, with the 3rd day having the smallest loss, the next week was positive the last 9 times, dating back to 1999. The overall win rate since 1928 is 63%. It took a median of 7 days to hit a fresh 52-week high.

The day before Good Friday tends to be positive. It wasn’t this year (barely). Of the 21 times since 1950 that the S&P closed down, the day after the holiday was positive only 38% of the time, which isn’t much different from any random day-after-Good Friday. The week after Good Friday was up 62% of those times, also about in line with any random Good Friday.

In a bull market would should anticipate bullish results, but Friday’s weak jobs report, and a with analysts less than enthusiastic about the upcoming earnings season, we don’t want to get too complacent. Keep an eye out for technical breakdowns. That will be the first sign that a correction is coming. Until then, buy the dips.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.

Tom Crowley
Weekly Wrap-Ups Archive
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