10/16/25
Stocks ran out of the opening bell gate with a big gap up open. However, it didn't take long for some profit taking to kick in after the S&P 500 ran up toward the recent highs, and in the case of small caps, making new highs, and the bulls had to fight back just to hold on to some of those morning gains. The bulls seem to have the edge, but the bears are still battling after last week's smack down.
The wild whipping around yesterday was somewhat concerning, but the bulls came out on top with moderate gains and with chart formations that are trying to cement a bottom for the recent pullback.
The S&P 500 (C-fund) flew past 6700 in early trading but it could not hold there although it did manage a 0.40% gain on the day. You can see how wide the daily trading ranges have been compared to the action in recent weeks, as volatility has risen, which is not unusual in October.
The VIX (Volatility Index) shows that the readings below 18 are over and we have seen it move over 22 three times in the last four trading sessions. The only day it didn't hit 22 was during Monday's holiday trading. 22 seems like an important level that needs to hold if the recent low made in the S&P 500 on Friday is going to hold.
The yield on the 10-year Treasury was down early yesterday but closed strong so 4.0% continues to hold. There is an open gap above 4.1% and near the overhead resistance line that could draw another relief rally, but this chart is trending lower, and the double bottom is the only thing keeping us from seeing a 3 handle on the 10-year.
The dollar (UUP) was down yesterday and I noticed that the 200-day simple moving average in red, is acting as some resistance. It had broken through the 200-day EMA in blue, which gave the impression that the downside trend may be done and a new uptrend is beginning, but that 200 day MA could do what the EMA couldn't do -- hold. I'm not sure. I just noticed that something was holding the dollar rally back recently, and now I see why.
This is a choppier market with more volatility which can be good for traders, but it is certainly tricky for us TSP'ers who have only two trades per month and we have to make our moves fours hours before the market closes. It's not impossible, but I still don't know why, in this instant access, instant information, and one click trading world, that we are still handcuffed to 1990's trading practices?
We are supposed to get the PPI report today. I'm not sure if that is impacted by the government shut down, but estimates are floating around. We won't get the CPI until the 24th. At least it comes out before the next FOMC meeting on the 28th and 29th.
DWCPF Index (S-Fund) broke out to a new high early yesterday with a big gain at the opening bell, but it gave back all of those gains at one point before closing with a moderate, but decent, gain. That red horizontal line continues to act as resistance as there have been no closes above it yet despite weeks of intraday attempts above it.
ACWX (I-fund) continued its rebound off the bottom of the trading channel, and now the dollar may be rolling over, which could help push it back to the top of the channel. Notice that all lows in the ACWX have a corresponding high in the UUP.
BND (bonds / F-fund) popped and dropped and landed right on that double dose of old resistance, which is trying to hold as support. As I mentioned yesterday, the 10-year yield may have to fall below 4% for the F-fund to continue rallying.
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
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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 ran out of the opening bell gate with a big gap up open. However, it didn't take long for some profit taking to kick in after the S&P 500 ran up toward the recent highs, and in the case of small caps, making new highs, and the bulls had to fight back just to hold on to some of those morning gains. The bulls seem to have the edge, but the bears are still battling after last week's smack down.
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The wild whipping around yesterday was somewhat concerning, but the bulls came out on top with moderate gains and with chart formations that are trying to cement a bottom for the recent pullback.
The S&P 500 (C-fund) flew past 6700 in early trading but it could not hold there although it did manage a 0.40% gain on the day. You can see how wide the daily trading ranges have been compared to the action in recent weeks, as volatility has risen, which is not unusual in October.
The VIX (Volatility Index) shows that the readings below 18 are over and we have seen it move over 22 three times in the last four trading sessions. The only day it didn't hit 22 was during Monday's holiday trading. 22 seems like an important level that needs to hold if the recent low made in the S&P 500 on Friday is going to hold.
The yield on the 10-year Treasury was down early yesterday but closed strong so 4.0% continues to hold. There is an open gap above 4.1% and near the overhead resistance line that could draw another relief rally, but this chart is trending lower, and the double bottom is the only thing keeping us from seeing a 3 handle on the 10-year.
The dollar (UUP) was down yesterday and I noticed that the 200-day simple moving average in red, is acting as some resistance. It had broken through the 200-day EMA in blue, which gave the impression that the downside trend may be done and a new uptrend is beginning, but that 200 day MA could do what the EMA couldn't do -- hold. I'm not sure. I just noticed that something was holding the dollar rally back recently, and now I see why.
This is a choppier market with more volatility which can be good for traders, but it is certainly tricky for us TSP'ers who have only two trades per month and we have to make our moves fours hours before the market closes. It's not impossible, but I still don't know why, in this instant access, instant information, and one click trading world, that we are still handcuffed to 1990's trading practices?
We are supposed to get the PPI report today. I'm not sure if that is impacted by the government shut down, but estimates are floating around. We won't get the CPI until the 24th. At least it comes out before the next FOMC meeting on the 28th and 29th.
DWCPF Index (S-Fund) broke out to a new high early yesterday with a big gain at the opening bell, but it gave back all of those gains at one point before closing with a moderate, but decent, gain. That red horizontal line continues to act as resistance as there have been no closes above it yet despite weeks of intraday attempts above it.
ACWX (I-fund) continued its rebound off the bottom of the trading channel, and now the dollar may be rolling over, which could help push it back to the top of the channel. Notice that all lows in the ACWX have a corresponding high in the UUP.
BND (bonds / F-fund) popped and dropped and landed right on that double dose of old resistance, which is trying to hold as support. As I mentioned yesterday, the 10-year yield may have to fall below 4% for the F-fund to continue rallying.
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.
