11/10/25
After a washout morning sell off, stocks stabilized late Friday morning, reversed course, and closed strong and at the highs of the day. In recent years the market hasn't made a lot of lows on a Friday, but in recent months that is exactly what has been happening. There's no guarantees the lows are in with everything that is going on, but the charts are trying to suggest the pullback could be over. Small caps had a big reversal as well, but that chart did crack last week.
We got the University of Michigan Consumer Sentiment report on Friday and it was one of the lowest readings ever! That can't be good, right? Ironically the indices bottomed and started rallying shortly after the release of the data on Friday, and historically it has led to blue skies ahead as, like many sentiment type of indicators, it tends to be a contrarian signal when at an extreme.
Source: TheMarketStats
The S&P 500 (C-fund) squeezed out a late gain on Friday after a temporary break below the 50-day EMA in early trading. It's a common thought on Wall Street that markets don't tend to bottom on Friday, instead we often see some downside follow through on Monday before a rebound, and as the phrase Turnaround Tuesdays suggests, Tuesday is more often the reversal day. But this year we have seen several intraday and / or closing lows on a Friday, and a rally the week after. No guarantees, of course, but this is a bullish sign as of now, or at least if this chart can get above that green moving average.
The weekly chart doesn't show anything special for the bulls. As a matter of fact, those black candlesticks with a long lower tail have not been a great indication for the following week, at least not over the last year. I marked a few other examples.
This weekly chart with the 20-week moving average shows that we haven't had a test of that average in a long time, and you can see that tests are actually quite common. Do we have to see 6500 before this pullback is over, or can these last two months of a year continue with out one of those tests?
The economic data has been mixed, at least the data we are able to get with the government shutdown. We've had weak jobs data but good earnings and a strong GDP data, and that has led to a volatile move in the 10-year Treasury Yield, although ironically flat on Friday. It broke above both the descending trading channel and the 50-day average last week, but it did close the week below the average. I am seeing a possible inverted head and shoulders pattern forming, which suggest a possible bottom for the 10-year, although technically the downtrend is still intact.
The dollar pulled back last week after breaking out to new recent highs during the prior week. It remains in an uptrend. We saw a double bottom rally off the July / September lows, but the fundamentals don't really paint a strong dollar story. And, it could get more bearish if this next story plays out...
I don't know how serious this is, or whether it would be a good thing and bad thing for the country, but Trump posted that after paying down some debt with the tariffs being collected, "A dividend of at least $2000 a person (not including high income people!) will be paid to everyone."
That sounds like stimulus, and that's usually a boost to the economy, which tends to get a bullish reaction from the stock market. Again, will it happen, when would it happen, etc.? It would be on a smaller scale than the Covid stimulus, but could still be inflationary. That's always a give and take when loosening money supplies whether it's government stimulus, the Fed cutting rates or increasing their balance sheet, etc. Will it be more helpful or hurtful?
The Dow Transportation Index made its highest close since July on Friday. Historically, this has been a bullish signal for the rest of the stock market, but this index has had a mind of its own the last year or more.
From tsp.gov: Holiday Closing
"Some financial markets will be closed on Tuesday, November 11, in observance of Veterans Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Tuesday night (November 11) will be processed Wednesday night (November 12), at Wednesday's closing share prices."
The DWCPF Index (S-Fund) had a great positive reversal day but technically it remains in a downtrend with the lower high and lower low on Friday, it is below its 50-day average and, after last week's sell off, it is now trading below the ascending trading channel.
ACWX (I-fund) held within its trading channel, held at its 50-day average, and has not made a lower low like the S-fund. This could be another low. We should know soon enough.
BND (bonds / F-fund) was down on Friday but is trying to hold at its 50-day average after breaking below its trading channel recently. Which way are yields going - is the million dollar question in the stock and bond markets right now.
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.
After a washout morning sell off, stocks stabilized late Friday morning, reversed course, and closed strong and at the highs of the day. In recent years the market hasn't made a lot of lows on a Friday, but in recent months that is exactly what has been happening. There's no guarantees the lows are in with everything that is going on, but the charts are trying to suggest the pullback could be over. Small caps had a big reversal as well, but that chart did crack last week.
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We got the University of Michigan Consumer Sentiment report on Friday and it was one of the lowest readings ever! That can't be good, right? Ironically the indices bottomed and started rallying shortly after the release of the data on Friday, and historically it has led to blue skies ahead as, like many sentiment type of indicators, it tends to be a contrarian signal when at an extreme.
Source: TheMarketStats
The S&P 500 (C-fund) squeezed out a late gain on Friday after a temporary break below the 50-day EMA in early trading. It's a common thought on Wall Street that markets don't tend to bottom on Friday, instead we often see some downside follow through on Monday before a rebound, and as the phrase Turnaround Tuesdays suggests, Tuesday is more often the reversal day. But this year we have seen several intraday and / or closing lows on a Friday, and a rally the week after. No guarantees, of course, but this is a bullish sign as of now, or at least if this chart can get above that green moving average.
The weekly chart doesn't show anything special for the bulls. As a matter of fact, those black candlesticks with a long lower tail have not been a great indication for the following week, at least not over the last year. I marked a few other examples.
This weekly chart with the 20-week moving average shows that we haven't had a test of that average in a long time, and you can see that tests are actually quite common. Do we have to see 6500 before this pullback is over, or can these last two months of a year continue with out one of those tests?
The economic data has been mixed, at least the data we are able to get with the government shutdown. We've had weak jobs data but good earnings and a strong GDP data, and that has led to a volatile move in the 10-year Treasury Yield, although ironically flat on Friday. It broke above both the descending trading channel and the 50-day average last week, but it did close the week below the average. I am seeing a possible inverted head and shoulders pattern forming, which suggest a possible bottom for the 10-year, although technically the downtrend is still intact.
The dollar pulled back last week after breaking out to new recent highs during the prior week. It remains in an uptrend. We saw a double bottom rally off the July / September lows, but the fundamentals don't really paint a strong dollar story. And, it could get more bearish if this next story plays out...
I don't know how serious this is, or whether it would be a good thing and bad thing for the country, but Trump posted that after paying down some debt with the tariffs being collected, "A dividend of at least $2000 a person (not including high income people!) will be paid to everyone."
That sounds like stimulus, and that's usually a boost to the economy, which tends to get a bullish reaction from the stock market. Again, will it happen, when would it happen, etc.? It would be on a smaller scale than the Covid stimulus, but could still be inflationary. That's always a give and take when loosening money supplies whether it's government stimulus, the Fed cutting rates or increasing their balance sheet, etc. Will it be more helpful or hurtful?
The Dow Transportation Index made its highest close since July on Friday. Historically, this has been a bullish signal for the rest of the stock market, but this index has had a mind of its own the last year or more.
From tsp.gov: Holiday Closing
"Some financial markets will be closed on Tuesday, November 11, in observance of Veterans Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Tuesday night (November 11) will be processed Wednesday night (November 12), at Wednesday's closing share prices."
The DWCPF Index (S-Fund) had a great positive reversal day but technically it remains in a downtrend with the lower high and lower low on Friday, it is below its 50-day average and, after last week's sell off, it is now trading below the ascending trading channel.
ACWX (I-fund) held within its trading channel, held at its 50-day average, and has not made a lower low like the S-fund. This could be another low. We should know soon enough.
BND (bonds / F-fund) was down on Friday but is trying to hold at its 50-day average after breaking below its trading channel recently. Which way are yields going - is the million dollar question in the stock and bond markets right now.
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.
