03/04/26
It was yet another day of early weakness that was accompanied by dip buyers showing up quickly and talking the indices off their lows. The losses were real yesterday, but the charts don't look nearly as bad as they could have, had the lows of the day held. The I-fund took a major haircut and it goes to show that the faster you go up, the harder you can fall.
The story yesterday was the rapid increase in the price of oil after the Iranian blockade in the Strait of Hormuz. The price of oil, and the stock market, seemed to turnaround (oil down, stocks up) after an announcement from President Trump that the U.S. will provide risk insurance for Gulf maritime trade and that the Navy will escort tankers through the Strait if necessary.
The S&P 500 (C-fund) was down over 170 points at its lows of the day, or 2.5%, taking out the December low at one point, before reversing and closing down less than 1%. The long kangaroo tail bodes well for telling us that there may be some short-term upside, although a test of those lows is always possible in the coming days or week, and it wouldn't take much in the Middle East to bring back the fear. The index closed just below the purple moving average near 6823, which had been holding for months, so that will be the bulls' next quest.
It is not unusual for the market to break in one direction to get investors leaning the wrong way, only for it to reverse direction and eventually breaking in the other. That's what I am watching for. But there's no green lights just yet. Yes, we could get some positive action off the reversal, but there is still plenty of resistance overhead and we got yet another, number 7, bearish Hindenburg Omen Signal yesterday. These get more reliable as they bunch up.
The action was quite dramatic in the TSP stock fund indices, so let's get right the others.
DWCPF (S-fund) broke down like the S&P 500, but recaptured the breakdown putting it right back in play for the bulls. It even closed above its key moving average again, which has been holding all year despite the wild gyrations. The bad news is this didn't nullify, or satisfy, the bearish head and shoulders pattern yet.
ACWX (I-fund) took a dramatic turn for the worse yesterday, after Monday's breakdown. Suddenly it is below the 50-day moving average, which hadn't been in the picture at all this year. Getting back above the broken support isn't usually very easy, so whether or not it can do that quickly, will tell us a lot about this fund's relative strength. For the last two years it has easily out performed the U.S. TSP stock funds.
The market leader and economically sensitive Transportation Index was down moderately, but it out performed the other indices after another successful test of the 20-day moving average, which has held since November.
Both bonds and gold were down yesterday, and those are the two main safety trades, if that tells us something about investors' concerns, or lack there of.
The 10-year Treasury Yield was up sharply early, but reversed down as the price of oil eased during the day yesterday. It remains below 4.1%.
The dollar was up sharply for a second straight day after the breakout from a cup and handle formation and the 50-dy average (purple.) This also reversed midday after the price of oil came off the highs, but the gain was enough to shake the I-fund.
We'll get a few economic reports this morning including ISM Services data, ADP Employment data, and some suddenly important crude oil reports.
Additional TSP Fund Charts:
BND (bonds / F-fund) was down modestly after a powerful reversal to the upside. There is some room on the downside if this wants to pull back more, but so far that old broken resistance line helped to hold as support.
Thanks so much for reading! We'll see you 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
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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.
It was yet another day of early weakness that was accompanied by dip buyers showing up quickly and talking the indices off their lows. The losses were real yesterday, but the charts don't look nearly as bad as they could have, had the lows of the day held. The I-fund took a major haircut and it goes to show that the faster you go up, the harder you can fall.
| Daily TSP Funds Return More returns |
The story yesterday was the rapid increase in the price of oil after the Iranian blockade in the Strait of Hormuz. The price of oil, and the stock market, seemed to turnaround (oil down, stocks up) after an announcement from President Trump that the U.S. will provide risk insurance for Gulf maritime trade and that the Navy will escort tankers through the Strait if necessary.
The S&P 500 (C-fund) was down over 170 points at its lows of the day, or 2.5%, taking out the December low at one point, before reversing and closing down less than 1%. The long kangaroo tail bodes well for telling us that there may be some short-term upside, although a test of those lows is always possible in the coming days or week, and it wouldn't take much in the Middle East to bring back the fear. The index closed just below the purple moving average near 6823, which had been holding for months, so that will be the bulls' next quest.
It is not unusual for the market to break in one direction to get investors leaning the wrong way, only for it to reverse direction and eventually breaking in the other. That's what I am watching for. But there's no green lights just yet. Yes, we could get some positive action off the reversal, but there is still plenty of resistance overhead and we got yet another, number 7, bearish Hindenburg Omen Signal yesterday. These get more reliable as they bunch up.
The action was quite dramatic in the TSP stock fund indices, so let's get right the others.
DWCPF (S-fund) broke down like the S&P 500, but recaptured the breakdown putting it right back in play for the bulls. It even closed above its key moving average again, which has been holding all year despite the wild gyrations. The bad news is this didn't nullify, or satisfy, the bearish head and shoulders pattern yet.
ACWX (I-fund) took a dramatic turn for the worse yesterday, after Monday's breakdown. Suddenly it is below the 50-day moving average, which hadn't been in the picture at all this year. Getting back above the broken support isn't usually very easy, so whether or not it can do that quickly, will tell us a lot about this fund's relative strength. For the last two years it has easily out performed the U.S. TSP stock funds.
The market leader and economically sensitive Transportation Index was down moderately, but it out performed the other indices after another successful test of the 20-day moving average, which has held since November.
Both bonds and gold were down yesterday, and those are the two main safety trades, if that tells us something about investors' concerns, or lack there of.
The 10-year Treasury Yield was up sharply early, but reversed down as the price of oil eased during the day yesterday. It remains below 4.1%.
The dollar was up sharply for a second straight day after the breakout from a cup and handle formation and the 50-dy average (purple.) This also reversed midday after the price of oil came off the highs, but the gain was enough to shake the I-fund.
We'll get a few economic reports this morning including ISM Services data, ADP Employment data, and some suddenly important crude oil reports.
Additional TSP Fund Charts:
BND (bonds / F-fund) was down modestly after a powerful reversal to the upside. There is some room on the downside if this wants to pull back more, but so far that old broken resistance line helped to hold as support.
Thanks so much for reading! We'll see you 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.
