TSP Talk Weekly Wrap Up

If you read our daily market commentary, you know that I have been all over this amazing streak of alternating daily up / down days in the S&P 500. With Friday’s decline, the streak is now 13 days going back to March 19. The good news is, if the streak continues, Monday should be a positive day for stocks. The bad news is, the weaker than expected jobs report on Friday could put a little more pressure on the buoyant stock indices.

Here are the up to date weekly, monthly, and annual TSP fund returns through April 5:

With estimates looking for a gain of 190,000 new jobs being added in the month of March, the +88,000 number shocked investors causing the early selloff on Friday. There is a tendency for the market to recover from big moves after a surprise jobs report and it used to take a couple of days to do that, but these days we see those recoveries happen much quicker, which is what happened on Friday as the indices closed well off of their lows. The trouble is, this kind of disappointment is the first real blow to the market this year and we don’t know if investors, who have made some very impressive gain this year, will start to think about protecting those profits and make an early exit from the usual “Sell in May and go away.”

The S&P 500 fell sharply on Friday after the jobs report was released; falling below the rising support line before buyers stepped up and took the index back above the support line and the 20-day EMA.

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

Despite the positive reversal day on Friday, the longer-term view shows that the S&P 500 is closer to the top of the intermediate-term trading channel and that resistance may mean the risk reward in the market remains on the risky side.

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

Our forum member JTH pointed out last week how similar the market is performing this year compared to the start of 2012.

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

He pointed out that after the strong start to 2012, last year’s spring highs came on the first trading day in April. This year’s high was hit last Monday – April 1st – so is it finally time for the market to give us a decent correction?

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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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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