06/02/25 (The most current commentary is always here: www.tsptalk.com/comments.php)
Stocks were mixed on Friday and it was another one of those roller coaster days where the early and late action were fine, but midday headlines created a deep "V" bottom low just after noon ET. Closing near the highs of the day in front of the weekend is a good sign that the bulls are still in charge, but the headlines are coming at us quickly. The question is whether they, good or bad, can derail the positive momentum we've seen in the stock market. Small caps lagged and lower yields helped the F-fund lead the TSP funds on Friday.
It was another headline driven stock market on Friday with bouts of confusing tariff news that kept investors on their toes, but otherwise we actually got some solid economic data.
First off, the Atlanta Fed raised their GDP forecast for Q2 to +3.8%. That was up from +2.2% just a few days before.
Second we got the PCE Prices inflation data which grew at a reasonable 2.1%, less than expected and basically at the Fed target rate for inflation. Consumer spending was down and wages were up.
And finally the University of Michigan Consumer Sentiment for May came in at 52.2, above the 50.8 consensus forecasts. That's on top of Tuesday's Consumer Confidence report that was 98.0 in May, 12.3 higher than April's number.
So the low inflation and higher growth data had the 10-year Treasury Yield closing at a 10-day low, but it remains in a range that may be fine for the stock market in the coming weeks. Any break above or below the box could change things.
The dollar (UUP) has been relatively flat the last week or so, but if that May 23 low can hold, it could be the bottom of the right shoulder of an inverted head and shoulders pattern. It's a little crooked, but there is some symmetry there. Inverted H&S patterns tend to break to the upside, but more so in an ascending market, and the dollar has actually been trending lower since it peaked in January, it's not clear which way this wants to go. The direction of the next break will greatly impact the I-fund
The S&P 500 (C-fund) was flat after a wild "V" shaped intraday low and a close near the highs as you seen in the large red box, but in the small red rectangle the index just about filled in last Tuesday's open gap. What made it all even more interesting was the spike in trading volume during the gap filling session. The reversal and close near the highs also left it above the support line of the rising blue trading channel.
It seemed like an odd place for a spike in volume so I looked back a year to see what I could find. We had the usual quarterly witching expiration Fridays which occur in March, June, September and December. We had the capitulation low in April. But then if I go back to the last trading day in May of last year, there was another spike in volume, a little smaller than this past Friday's, but it also happened to be the bottom of a brief pullback and preceded a major rally.
There were just a few more isolated volume spikes in there as well, including after Election Day, but all of those that I see also led to an upside move, at least the short-term. There was some high volume days in early March that was the start of the bear market, but it's those odd isolated ones that intrigued me.
The Dow Transportation Index, which is usually one of the market leaders, although it has been lagging this year despite the big move off the lows, is now in the apex of a pennant like formation, and they tend to break to the upside if it is trending upward. There's also a possible inverted head and shoulders pattern there with 15,000 being the neckline. If these patterns breakout, they can create market bottoms, if we haven't already concluded that the lows are in.
The futures were moderately negative on Sunday night so the bulls and the dip buyers may have to prove themselves again to start the new week.
The May TSP Talk AutoTracker winners have been posted in the forum. Congratulations to REAPER for being the top return for the month at +8.88%, and the other top 5 finishers who had gains of +7.66% to +8.36%! Great job! This is why we do this. Get in on the action - it's free!
How are you doing? You can follow the transactions of these monthly, and the annual leaders, by subscribing to the Last Look Report. Click here for more information.
The DWCPF (S-fund) looked bad most of the day on Friday but the fact that it found support, and closed above, the 200-day average, the bottom of the ascending trading channel, and the March peak, was all classic bull market action. Inside the red box is a zoomed in look at a gap fill on Friday, and that held as support as well. The futures are red heading into Monday morning, but this looks pretty good.
ACWX (I-fund) has been taking a well deserved rest in the last few days. There's key support near 59 and resistance at the old highs of 60+. Support is very thin on this chart so if this breaks down without building some kind of base first, it could be vulnerable to a big decline. A move down to 58 or even 57 that holds could be the best thing technically that could happen to this chart. That would test some old resistance and the 50-day EMA, plus fill in that open gap.
BND (bonds / F-fund) has been churning in a range like the 10-year Treasury Yield but a case can be made that this is a bullish looking inverted head and shoulders pattern. If that is the case, there is resistance just overhead for an imminent test.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. 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 may use additional methods and strategies to determine fund positions.
Stocks were mixed on Friday and it was another one of those roller coaster days where the early and late action were fine, but midday headlines created a deep "V" bottom low just after noon ET. Closing near the highs of the day in front of the weekend is a good sign that the bulls are still in charge, but the headlines are coming at us quickly. The question is whether they, good or bad, can derail the positive momentum we've seen in the stock market. Small caps lagged and lower yields helped the F-fund lead the TSP funds on Friday.
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It was another headline driven stock market on Friday with bouts of confusing tariff news that kept investors on their toes, but otherwise we actually got some solid economic data.
First off, the Atlanta Fed raised their GDP forecast for Q2 to +3.8%. That was up from +2.2% just a few days before.
Second we got the PCE Prices inflation data which grew at a reasonable 2.1%, less than expected and basically at the Fed target rate for inflation. Consumer spending was down and wages were up.
And finally the University of Michigan Consumer Sentiment for May came in at 52.2, above the 50.8 consensus forecasts. That's on top of Tuesday's Consumer Confidence report that was 98.0 in May, 12.3 higher than April's number.
So the low inflation and higher growth data had the 10-year Treasury Yield closing at a 10-day low, but it remains in a range that may be fine for the stock market in the coming weeks. Any break above or below the box could change things.
The dollar (UUP) has been relatively flat the last week or so, but if that May 23 low can hold, it could be the bottom of the right shoulder of an inverted head and shoulders pattern. It's a little crooked, but there is some symmetry there. Inverted H&S patterns tend to break to the upside, but more so in an ascending market, and the dollar has actually been trending lower since it peaked in January, it's not clear which way this wants to go. The direction of the next break will greatly impact the I-fund
The S&P 500 (C-fund) was flat after a wild "V" shaped intraday low and a close near the highs as you seen in the large red box, but in the small red rectangle the index just about filled in last Tuesday's open gap. What made it all even more interesting was the spike in trading volume during the gap filling session. The reversal and close near the highs also left it above the support line of the rising blue trading channel.
It seemed like an odd place for a spike in volume so I looked back a year to see what I could find. We had the usual quarterly witching expiration Fridays which occur in March, June, September and December. We had the capitulation low in April. But then if I go back to the last trading day in May of last year, there was another spike in volume, a little smaller than this past Friday's, but it also happened to be the bottom of a brief pullback and preceded a major rally.
There were just a few more isolated volume spikes in there as well, including after Election Day, but all of those that I see also led to an upside move, at least the short-term. There was some high volume days in early March that was the start of the bear market, but it's those odd isolated ones that intrigued me.
The Dow Transportation Index, which is usually one of the market leaders, although it has been lagging this year despite the big move off the lows, is now in the apex of a pennant like formation, and they tend to break to the upside if it is trending upward. There's also a possible inverted head and shoulders pattern there with 15,000 being the neckline. If these patterns breakout, they can create market bottoms, if we haven't already concluded that the lows are in.
The futures were moderately negative on Sunday night so the bulls and the dip buyers may have to prove themselves again to start the new week.
The May TSP Talk AutoTracker winners have been posted in the forum. Congratulations to REAPER for being the top return for the month at +8.88%, and the other top 5 finishers who had gains of +7.66% to +8.36%! Great job! This is why we do this. Get in on the action - it's free!
How are you doing? You can follow the transactions of these monthly, and the annual leaders, by subscribing to the Last Look Report. Click here for more information.
The DWCPF (S-fund) looked bad most of the day on Friday but the fact that it found support, and closed above, the 200-day average, the bottom of the ascending trading channel, and the March peak, was all classic bull market action. Inside the red box is a zoomed in look at a gap fill on Friday, and that held as support as well. The futures are red heading into Monday morning, but this looks pretty good.
ACWX (I-fund) has been taking a well deserved rest in the last few days. There's key support near 59 and resistance at the old highs of 60+. Support is very thin on this chart so if this breaks down without building some kind of base first, it could be vulnerable to a big decline. A move down to 58 or even 57 that holds could be the best thing technically that could happen to this chart. That would test some old resistance and the 50-day EMA, plus fill in that open gap.
BND (bonds / F-fund) has been churning in a range like the 10-year Treasury Yield but a case can be made that this is a bullish looking inverted head and shoulders pattern. If that is the case, there is resistance just overhead for an imminent test.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. 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 may use additional methods and strategies to determine fund positions.
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