10/08/25
Stocks can't go up everyday, and despite a positive open, the indices took a much needed break yesterday and dipped lower. The loss broke another long winning streak for the S&P 500. The intraday lows were made earlier in the day so while there wasn't a wave of dip buying yet, the bulls were able to hold off the bears for several hours into the close. We saw yields fall back down helping the F-fund rebound, but the dollar continued to rally and that put pressure on the I-fund. Small caps were hit the hardest yesterday.
I know this isn't overly exciting, but yields and the dollar have a major impact on the direction of prices, and while we saw the 10-Year Treasury Yield back off from some heavy resistance yesterday, the dollar jumped over another layer of resistance.
It is likely related, but we saw the crypto currencies fall sharply yesterday when the dollar (UUP) moved above resistance, but interestingly gold futures were up again and closed above $4000 for the first time ever. Both gold and the cryptos have been very hot lately, but seeing gold make all time highs on a day that the dollar broke out seems odd.
It may be a sign that the rally in gold needs a breather going forward as it could trigger some profit taking. That is unless we go the conspiracy theory route and believe the move in gold is being triggered by something more ominous that most of us are not aware of yet.
The joke on Wall Street right now is that the talk of bubbles, is in a bubble right now. You can look at a lot of charts going back to the bottom in April and see bubble like action, although this bull market is actually inline with many prior bull markets and may have plenty of more time to run, but they don't usually go straight up like we've seen over the past six months.
The S&P 500 (C-fund) made another all time high in the morning yesterday before the pullback started and ended a 7-day winning streak. The low yesterday hit the top of the September highs, which is classic support and legit technical action. 6650 is still in play but anything below that would have to snap back quickly otherwise a long overdue test of the 50-day average could be the next play. Of course I have likely said this each time a pullback started and only once did this chart fall below that red support line, and it actually closed above it on the day it occurred (Sep 2).
The Dow Transportation Index got slammed yesterday but it landed right on that 50-day EMA again. As I have been saying for weeks, this chart is coiling up for a big move one way or the other. Support continues to hold, but there is a lot of selling when this starts nearing 15,900.
The October seasonality chart shows choppy, volatile action. We have had mostly bullish action so far this month but historically many days this month are down more often than up. Of course the August and September seasonality charts were leaning heavily on the bearish side, and that proved to be misleading information this year. But you know how it goes --- as soon as we give up on historical data, it will start behaving typically again.
Source: www.sentimentrader.com
Tomorrow is one of the least bullish days of the month historically, but in the days following we see more trading days that are down more often than up (blue graph), but the average return is positive.
The DWCPF (S-fund) took a big hit yesterday but it closed off its lows after another successful test of that blue support line. It hasn't tested its 50-day average since that first trading day in August where it immediately reversed back up.
ACWX (I-fund) took hit yesterday as it backed off from the top of its trading channel and, as I mentioned, the breakout in the dollar put the pressure on here, and what happens next may depend on whether that UUP chart falls back down, or if it is a legitimate breakout. I like to see at least 3 closes above resistance to confirm it. Yesterday was close #2.
BND (bonds / F-fund) was up but remains below some resistance, however we did see the 10-year Treasury Yield back off from its resistance so bonds may try to make a move higher. Strong economic data tends to move BND down, and weak data could push it higher. Bonds also tend to rally if stocks turn bearish, but that's only a tendency.
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 can't go up everyday, and despite a positive open, the indices took a much needed break yesterday and dipped lower. The loss broke another long winning streak for the S&P 500. The intraday lows were made earlier in the day so while there wasn't a wave of dip buying yet, the bulls were able to hold off the bears for several hours into the close. We saw yields fall back down helping the F-fund rebound, but the dollar continued to rally and that put pressure on the I-fund. Small caps were hit the hardest yesterday.
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I know this isn't overly exciting, but yields and the dollar have a major impact on the direction of prices, and while we saw the 10-Year Treasury Yield back off from some heavy resistance yesterday, the dollar jumped over another layer of resistance.
It is likely related, but we saw the crypto currencies fall sharply yesterday when the dollar (UUP) moved above resistance, but interestingly gold futures were up again and closed above $4000 for the first time ever. Both gold and the cryptos have been very hot lately, but seeing gold make all time highs on a day that the dollar broke out seems odd.
It may be a sign that the rally in gold needs a breather going forward as it could trigger some profit taking. That is unless we go the conspiracy theory route and believe the move in gold is being triggered by something more ominous that most of us are not aware of yet.
The joke on Wall Street right now is that the talk of bubbles, is in a bubble right now. You can look at a lot of charts going back to the bottom in April and see bubble like action, although this bull market is actually inline with many prior bull markets and may have plenty of more time to run, but they don't usually go straight up like we've seen over the past six months.
The S&P 500 (C-fund) made another all time high in the morning yesterday before the pullback started and ended a 7-day winning streak. The low yesterday hit the top of the September highs, which is classic support and legit technical action. 6650 is still in play but anything below that would have to snap back quickly otherwise a long overdue test of the 50-day average could be the next play. Of course I have likely said this each time a pullback started and only once did this chart fall below that red support line, and it actually closed above it on the day it occurred (Sep 2).
The Dow Transportation Index got slammed yesterday but it landed right on that 50-day EMA again. As I have been saying for weeks, this chart is coiling up for a big move one way or the other. Support continues to hold, but there is a lot of selling when this starts nearing 15,900.
The October seasonality chart shows choppy, volatile action. We have had mostly bullish action so far this month but historically many days this month are down more often than up. Of course the August and September seasonality charts were leaning heavily on the bearish side, and that proved to be misleading information this year. But you know how it goes --- as soon as we give up on historical data, it will start behaving typically again.
Source: www.sentimentrader.com
Tomorrow is one of the least bullish days of the month historically, but in the days following we see more trading days that are down more often than up (blue graph), but the average return is positive.
The DWCPF (S-fund) took a big hit yesterday but it closed off its lows after another successful test of that blue support line. It hasn't tested its 50-day average since that first trading day in August where it immediately reversed back up.
ACWX (I-fund) took hit yesterday as it backed off from the top of its trading channel and, as I mentioned, the breakout in the dollar put the pressure on here, and what happens next may depend on whether that UUP chart falls back down, or if it is a legitimate breakout. I like to see at least 3 closes above resistance to confirm it. Yesterday was close #2.
BND (bonds / F-fund) was up but remains below some resistance, however we did see the 10-year Treasury Yield back off from its resistance so bonds may try to make a move higher. Strong economic data tends to move BND down, and weak data could push it higher. Bonds also tend to rally if stocks turn bearish, but that's only a tendency.
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.
