12/01/25
The Thanksgiving week rally was a rare one where all four trading days saw meaningful gains. The S&P 500 gained 0.54% on Friday that was just enough to push it into positive territory for the month of November. It is a good set up for December but we do have some geopolitical events in the headlines that could bring some volatility. Bonds were down with yields moving up on Friday.
Only the S-fund ended November with a loss in the TSP funds, but it also came roaring back from some steep losses with that gain of 5.23% last week. The C and I-funds gained 3.74% and 3.02% respectively last week, pushing both funds into positive territory for November.
The S&P 500 (C-fund) cut through several layers of resistance with that parabolic move over the last five trading days. It is back within the red ascending trading channel, and that kind of action means it will likely attempt to make new highs this month, and it's not far off from that October peak already.
The spike in volume near the lows last Monday had a capitulation feel to it, and then the light holiday trading dried up the volume, and that could have a couple of meanings. One could suggest that institutional investors may have not been participating in the rally, although that spike on Monday probably means they were part of the buying that day. But low volume also could mean there is a lot of money still on the sidelines to fuel more buying.
This chart shows that since 1928, December has been up 73% of the time, the best month of the year in that regard, and the average return is +1.28%, which is number 2 behind only July's +1.67% average.
As always, except maybe surrounding major holidays, seasonality is not typically a primary indicator and August through October reminded us of that as they handily outperformed their historical tendencies.
That five minute rally late on Friday helped cement in a seventh straight positive month for the S&P 500. That's very rare and while December has a great record overall, the last 7 month rally ended with big losses in the eighth month in 2021. I'm not expecting a loss but maybe some profit taking along the way?
Since the Fed started to indicate that a December interest rate cut was questionable, the dollar has been rallying. A strong dollar will put pressure on prices in general, including the stock market. Last week's pullback in the dollar helped fuel the rally in stocks. With UUP sitting right on some support, a December rally could hinge on whether that support holds or not.
There are meaningful open gaps above and below on the longer-term chart, so there is a lure from both directions.
We get a lot of economic data this week, but don't forget that normal first Friday of the month jobs report has been postponed until Tuesday December 16 and the report will include both the October and November employment data. Tuesday the 16th is a very odd date indeed since the are always released on Fridays. The 16th will be after the Fed's December 10th FOMC meeting, when they will announce their decision on interest rates.
Last I checked, the odds of another 0.25% cut at that meeting is 87.4%, helping fuel the stock market's rebound.
I don't have a good feel for what the situation with Venezuela will have on the markets, but with their role in the oil market, I suspect it will have some impact, although these are usually short-term reactions.
Crypto-currencies were selling off on Sunday night and the stock market futures were following.
The DWCPF Index (S-Fund) made it back above several tough resistance areas with the next being the bottom of the old red channel. But that channel is rising and the resistance line is still 2% overhead. 2575 may be the target before a modest dip?
ACWX (I-fund) wasn't running like the US funds but it did rally nicely to close positive in November. This one is currently testing the bottom of its channel, so today could be a good test for investor's appetite to buy at resistance, or we'll see if they prefer to sell the rallies into resistance. Being above a rising 50-day moving average is usually a good thing.
BND (bonds / F-fund) is having a little double top pullback syndrome, which is perfectly normal. The chart looks fine but it could pullback a little first.
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 use additional methods and strategies to determine fund positions.
The Thanksgiving week rally was a rare one where all four trading days saw meaningful gains. The S&P 500 gained 0.54% on Friday that was just enough to push it into positive territory for the month of November. It is a good set up for December but we do have some geopolitical events in the headlines that could bring some volatility. Bonds were down with yields moving up on Friday.
| Daily TSP Funds Return
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Only the S-fund ended November with a loss in the TSP funds, but it also came roaring back from some steep losses with that gain of 5.23% last week. The C and I-funds gained 3.74% and 3.02% respectively last week, pushing both funds into positive territory for November.
The S&P 500 (C-fund) cut through several layers of resistance with that parabolic move over the last five trading days. It is back within the red ascending trading channel, and that kind of action means it will likely attempt to make new highs this month, and it's not far off from that October peak already.
The spike in volume near the lows last Monday had a capitulation feel to it, and then the light holiday trading dried up the volume, and that could have a couple of meanings. One could suggest that institutional investors may have not been participating in the rally, although that spike on Monday probably means they were part of the buying that day. But low volume also could mean there is a lot of money still on the sidelines to fuel more buying.
This chart shows that since 1928, December has been up 73% of the time, the best month of the year in that regard, and the average return is +1.28%, which is number 2 behind only July's +1.67% average.
As always, except maybe surrounding major holidays, seasonality is not typically a primary indicator and August through October reminded us of that as they handily outperformed their historical tendencies.
That five minute rally late on Friday helped cement in a seventh straight positive month for the S&P 500. That's very rare and while December has a great record overall, the last 7 month rally ended with big losses in the eighth month in 2021. I'm not expecting a loss but maybe some profit taking along the way?
Since the Fed started to indicate that a December interest rate cut was questionable, the dollar has been rallying. A strong dollar will put pressure on prices in general, including the stock market. Last week's pullback in the dollar helped fuel the rally in stocks. With UUP sitting right on some support, a December rally could hinge on whether that support holds or not.
There are meaningful open gaps above and below on the longer-term chart, so there is a lure from both directions.
We get a lot of economic data this week, but don't forget that normal first Friday of the month jobs report has been postponed until Tuesday December 16 and the report will include both the October and November employment data. Tuesday the 16th is a very odd date indeed since the are always released on Fridays. The 16th will be after the Fed's December 10th FOMC meeting, when they will announce their decision on interest rates.
Last I checked, the odds of another 0.25% cut at that meeting is 87.4%, helping fuel the stock market's rebound.
I don't have a good feel for what the situation with Venezuela will have on the markets, but with their role in the oil market, I suspect it will have some impact, although these are usually short-term reactions.
Crypto-currencies were selling off on Sunday night and the stock market futures were following.
The DWCPF Index (S-Fund) made it back above several tough resistance areas with the next being the bottom of the old red channel. But that channel is rising and the resistance line is still 2% overhead. 2575 may be the target before a modest dip?
ACWX (I-fund) wasn't running like the US funds but it did rally nicely to close positive in November. This one is currently testing the bottom of its channel, so today could be a good test for investor's appetite to buy at resistance, or we'll see if they prefer to sell the rallies into resistance. Being above a rising 50-day moving average is usually a good thing.
BND (bonds / F-fund) is having a little double top pullback syndrome, which is perfectly normal. The chart looks fine but it could pullback a little first.
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 use additional methods and strategies to determine fund positions.
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