Good Evening,
The Jobs report came in at 213,000 today, less than the 231,000 that was forecast, but still good enough to bring unemployment down a tick to 5.8%. This caused the market to rise to new highs– barely, that is. To me, the action was flat all day and ended flat with the major indices gaining an average of less than a tenth of a percent. However, a gain is a gain and we’ll take it. As a result, TSP and AMP posted small gains on the day and ended up for the week.
Dollar slips, global stocks flat after U.S. jobs data
The day’s action left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Neutral. We are currently invested at 30/C, 70/S. Our allocation is now -1.54% on the year not including today’s action. Here are the latest posed results.
| 11/06/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5712 | 16.6151 | 26.7082 | 35.5202 | 24.7372 |
| $ Change | 0.0009 | -0.0180 | 0.1088 | 0.2273 | -0.0932 |
| % Change day | +0.01% | -0.11% | +0.41% | +0.64% | -0.38% |
| % Change week | +0.04% | -0.18% | +0.72% | +0.15% | -1.58% |
| % Change month | +0.04% | -0.18% | +0.72% | +0.15% | -1.58% |
| % Change year | +1.99% | +5.55% | +11.87% | +5.49% | -3.24% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.3666 | 22.7722 | 24.6509 | 26.196 | 14.8588 |
| $ Change | 0.0083 | 0.0241 | 0.0354 | 0.0460 | 0.0284 |
| % Change day | +0.05% | +0.11% | +0.14% | +0.18% | +0.19% |
| % Change week | +0.03% | -0.03% | -0.04% | -0.04% | -0.07% |
| % Change month | +0.03% | -0.03% | -0.04% | -0.04% | -0.07% |
| % Change year | +3.27% | +4.48% | +5.08% | +5.48% | +5.66% |
The F Fund had a nice gain today improving its chart from sell to neutral. That gain will show up on the next set of results. Could that signal a change in the character of the market? It’s always possible, but I don’t think so. I have said all along that I think the going would be a little rougher in November and December after the stellar run that occurred in the last part of October. To be precise, I said there would only be small to moderate gains and I’m still sticking to that prediction. Actually, I was basing that on what I was seeing in the charts. The majority of them are in need of a rest, but that just refuses to happen with the influence of positive seasonality and the Wall Street friendly election results. The situation could be likened to a toddler that stays up late at night and simply refuses to go to sleep until finally it comes upon them from sheer exhaustion. Markets seldom fall apart. Topping is more of a process and as chartists we will hang with the trend until the aforementioned exhaustion sets in and things move in a different direction. Our best scenario takes place when we see this coming and are able to average out of our positions in equities rather than being forced out of them all at once as a result of volatile conditions. Of course, what we think is going to happen isn’t always the case and that is the reason that we watch the charts and react to whatever they give us.
Let’s take a look at the SPY with the Decision Point Crew again tonight. (Charts courtesy of stockcharts.com)
Price remains above horizontal support, but resistance is only about a point away. Momentum is still measuring positive as the PMO continues to rise. It is close to near-term overbought territory (remember the typical PMO range for the SPY is 2.5 to -2.5) indicating a possible price top or consolidation.
The weekly chart looks somewhat bullish. Overhead resistance is only slightly higher than on the daily chart. But, there is room for price to move higher and the PMO is rising.
Conclusion: The market consolidated today but it wasn’t enough to clear overbought conditions in the short or intermediate term. Overbought market conditions suggest lower prices are ahead. We’ve been holding onto the fact that intermediate-term indicators have been bullish, but they are turning bearish because they are getting too overbought. Look for consolidation or a pullback soon.
For the most part, I agree with their analysis. They sound a tad bit more bearish than I feel, but we both a agree that there will be a correction at some point. I think that the market will continue to stagger forward for a while before that takes place.
We’ll see. That’s the reason we read the charts. If we had a crystal ball we wouldn’t need them. What we do have, though, is our Heavenly Father and He has always been faithful to guide our group when we pray. That’s all for tonight. I have to get some rest as I’ll be heading out early to see the Kentucky vs. Georgia game with a good friend who was kind enough to provide me with an extra ticket. I hope you all are having a nice weekend as well.
God bless,
Scott
