07/24/25
Stocks opened higher on Wednesday after the trade deal with Japan was announced the prior night. After a couple of hours of some choppy trading, the bulls took over and the indices were off to the races. Yields were up but that didn't stop the small caps in the S-fund from outperforming the C-fund again, and the I-fund had a huge day after global markets reacted to the trade deal, led by Japan's 3.5% gain.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The stock market opened higher, about 20 S&P 500 points or so, but the index floundered in the first couple of hours, and I actually saw this as a possible negative and almost did more selling before our TSP transaction deadline.
I held off knowing the Magnificent 7 earnings were coming after the bell. I don't know what happened at noon ET, but stocks took off in the afternoon, and it was a powerful move. I did not do anymore selling, but ironically I'm even more concerned about overly the stretched indices, but the momentum is tough to fight right now. The rubber band is stretching, but we've seen these stretch a lot longer than we think they should. Last year that rubber band snapped about this time of year, but no signs of that yet this summer.
Tesla and Google (aka Alphabet) reported earnings after the closing bell yesterday and Google beat estimates and was up in after hours trading, while Tesla missed and was down. Google's 2% gain after hours is lifting the overnight index futures modestly again.
Dow component IBM was getting slammed after hours, but it is not the market mover it once was.
The S&P 500 (C-fund) rallied nicely and stalled at a trend line that runs parallel to the broken (blue dashed) resistance, but based on the overnight trading, that may not hold unless something unexpected happens before the opening bell today. It's tough to argue with this chart at this point, except to say that is may have come too far, too fast?
There are many reasons both technically and fundamentally why the rally should run out of steam, but there's no law that it has to. We've seen them before and we'll see them again. It will keep climbing until it stops. The buy and holders and trend traders are maxing out gains, and market timers are likely underinvested. At some point it will all change, but no one will ring a bell for us at the top.
Next week is a busy one with more Mag 7 earnings, an FOMC meeting, and the July jobs report next Friday.
The DWCPF / S-fund made a new multi-month high yesterday but also tagged the top of its parallel channel, but the futures may be suggesting that resistance is just a temporary stop. Technically, another gap opened up at Tuesday's closing price. It's not a stretch to expect that to get filled quickly near 2366, but that would mean giving back yesterday's gains.
Longer-term this could be considered a double top although the actual prior peak for DWCPF occurred at 2471 last November, so there is room above if it can get past this double top area.
ACWX (I-fund) had a huge day, gapping up after the Japan trade deal. Japan is one of the largest holdings in the I-fund and it was up 3.5% on Wednesday. ACWX is back in the trading channel after busting back above the old broken support line. Was this a blow off top, or does the rally keep going? What happens if the next trade deal falls through?
BND (bonds / F-fund) pulled back modestly yesterday after the three day rally. There is an open gap below the old resistance line, so that's a possible pullback target if that old resistance can't hold as support.
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.
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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 opened higher on Wednesday after the trade deal with Japan was announced the prior night. After a couple of hours of some choppy trading, the bulls took over and the indices were off to the races. Yields were up but that didn't stop the small caps in the S-fund from outperforming the C-fund again, and the I-fund had a huge day after global markets reacted to the trade deal, led by Japan's 3.5% gain.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The stock market opened higher, about 20 S&P 500 points or so, but the index floundered in the first couple of hours, and I actually saw this as a possible negative and almost did more selling before our TSP transaction deadline.
I held off knowing the Magnificent 7 earnings were coming after the bell. I don't know what happened at noon ET, but stocks took off in the afternoon, and it was a powerful move. I did not do anymore selling, but ironically I'm even more concerned about overly the stretched indices, but the momentum is tough to fight right now. The rubber band is stretching, but we've seen these stretch a lot longer than we think they should. Last year that rubber band snapped about this time of year, but no signs of that yet this summer.
Tesla and Google (aka Alphabet) reported earnings after the closing bell yesterday and Google beat estimates and was up in after hours trading, while Tesla missed and was down. Google's 2% gain after hours is lifting the overnight index futures modestly again.
Dow component IBM was getting slammed after hours, but it is not the market mover it once was.
The S&P 500 (C-fund) rallied nicely and stalled at a trend line that runs parallel to the broken (blue dashed) resistance, but based on the overnight trading, that may not hold unless something unexpected happens before the opening bell today. It's tough to argue with this chart at this point, except to say that is may have come too far, too fast?
There are many reasons both technically and fundamentally why the rally should run out of steam, but there's no law that it has to. We've seen them before and we'll see them again. It will keep climbing until it stops. The buy and holders and trend traders are maxing out gains, and market timers are likely underinvested. At some point it will all change, but no one will ring a bell for us at the top.
Next week is a busy one with more Mag 7 earnings, an FOMC meeting, and the July jobs report next Friday.
The DWCPF / S-fund made a new multi-month high yesterday but also tagged the top of its parallel channel, but the futures may be suggesting that resistance is just a temporary stop. Technically, another gap opened up at Tuesday's closing price. It's not a stretch to expect that to get filled quickly near 2366, but that would mean giving back yesterday's gains.
Longer-term this could be considered a double top although the actual prior peak for DWCPF occurred at 2471 last November, so there is room above if it can get past this double top area.
ACWX (I-fund) had a huge day, gapping up after the Japan trade deal. Japan is one of the largest holdings in the I-fund and it was up 3.5% on Wednesday. ACWX is back in the trading channel after busting back above the old broken support line. Was this a blow off top, or does the rally keep going? What happens if the next trade deal falls through?
BND (bonds / F-fund) pulled back modestly yesterday after the three day rally. There is an open gap below the old resistance line, so that's a possible pullback target if that old resistance can't hold as support.
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.
