09/18/25
Stocks crawled into the Fed policy statement yesterday afternoon with modest losses and, after some gyrating, came out the other end with modest losses. The Federal Reserve did cut the Fed Funds Rate by 0.25% and all but one Fed governors are expecting at least one more cut over the next year. Yields moved up on the day giving the F-fund a loss.
Yesterday we talked about how both sides of the, "to cut or not to cut", argument had good points. Yesterday the Fed admitted the complexity of their call as he said there was no risk-free path.
The various Fed members were all over the place in their opinions. Not all wanted a rate cut yesterday (1) and one member, Trump's recent nominee, wanted yesterday's cut to be a 0.50% move. He was also the one who believes 5 more cuts over the next year are needed, while others were split between no more cuts in the next year, and two more cuts. Two members wanted just one more cut.
The 10-year Treasury Yield was up on the news as we saw a sell the news reaction in the bond market. Bonds (F-fund) go down when yields go up. It looks like the 10-year Yield may want to bounce up and fill in that open gap, near the breakdown line at 4.16%, after the positive outside reversal day.
The dollar was down sharply initially yesterday and basically filled in a small open gap before reversing to the upside by quite a bit, creating a positive outside reversal day on the UUP chart. This too may be looking to fill in a recently opened gap. The blue gaps have been filled, and the red gaps are still open.
The S&P 500 / C-fund was down slightly yesterday but it had to battle back from an initial negative reaction to the Fed. Technically it is a negative outside reversal day, but it also created a positive kangaroo tail like reversal. Just a typical, volatile Fed day. There's a lot more room on the downside in that channel and we're probably due for another test of that green 20-day average, but the dip buyers are making it tough on the bears to do any damage. I see the futures were up overnight so the bulls appear to be ready again.
The Dow Transportation Index lost almost 1% on the day, and if not for the support at the 200-day average, which has held twice in the last week, it may have broken down. This index still has life as long as that average is holding it up, but that average is also moving lower. It also looks like a neckline of a head and shoulders pattern so 15,400 or so is a key support level.
With the Fed out of the way and the normal volatile gyrations that go along with an FOMC meeting day, today and tomorrow may tell us which way the market really wants to go, now that investors have a lot more information.
The DWCPF (S-fund) was the out performer yesterday but it lost an earlier solid gain above resistance, and technically it looks like a negative outside reversal day. But with being an FOMC day, perhaps we can forgive the expected volatility for the moment. For now, it remains in the ascending trading channel.
ACWX (I-fund) also had a wild outside day but it was more of a spinning top, which may be an indication of a turning point, but again the volatility came during a Fed meeting so we'll just have to wait and see if this indecision formation does what they tend to do. Reverse the trend.
BND (bonds / F-fund) had a "real" negative outside reversal day - again during a Fed meeting. The old resistance line held but this looks a little more serious and perhaps that open gap is about to get filled.
Thanks so much for reading! We'll see you back 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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Stocks crawled into the Fed policy statement yesterday afternoon with modest losses and, after some gyrating, came out the other end with modest losses. The Federal Reserve did cut the Fed Funds Rate by 0.25% and all but one Fed governors are expecting at least one more cut over the next year. Yields moved up on the day giving the F-fund a loss.
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Yesterday we talked about how both sides of the, "to cut or not to cut", argument had good points. Yesterday the Fed admitted the complexity of their call as he said there was no risk-free path.
The various Fed members were all over the place in their opinions. Not all wanted a rate cut yesterday (1) and one member, Trump's recent nominee, wanted yesterday's cut to be a 0.50% move. He was also the one who believes 5 more cuts over the next year are needed, while others were split between no more cuts in the next year, and two more cuts. Two members wanted just one more cut.
The 10-year Treasury Yield was up on the news as we saw a sell the news reaction in the bond market. Bonds (F-fund) go down when yields go up. It looks like the 10-year Yield may want to bounce up and fill in that open gap, near the breakdown line at 4.16%, after the positive outside reversal day.
The dollar was down sharply initially yesterday and basically filled in a small open gap before reversing to the upside by quite a bit, creating a positive outside reversal day on the UUP chart. This too may be looking to fill in a recently opened gap. The blue gaps have been filled, and the red gaps are still open.
The S&P 500 / C-fund was down slightly yesterday but it had to battle back from an initial negative reaction to the Fed. Technically it is a negative outside reversal day, but it also created a positive kangaroo tail like reversal. Just a typical, volatile Fed day. There's a lot more room on the downside in that channel and we're probably due for another test of that green 20-day average, but the dip buyers are making it tough on the bears to do any damage. I see the futures were up overnight so the bulls appear to be ready again.
The Dow Transportation Index lost almost 1% on the day, and if not for the support at the 200-day average, which has held twice in the last week, it may have broken down. This index still has life as long as that average is holding it up, but that average is also moving lower. It also looks like a neckline of a head and shoulders pattern so 15,400 or so is a key support level.
With the Fed out of the way and the normal volatile gyrations that go along with an FOMC meeting day, today and tomorrow may tell us which way the market really wants to go, now that investors have a lot more information.
The DWCPF (S-fund) was the out performer yesterday but it lost an earlier solid gain above resistance, and technically it looks like a negative outside reversal day. But with being an FOMC day, perhaps we can forgive the expected volatility for the moment. For now, it remains in the ascending trading channel.
ACWX (I-fund) also had a wild outside day but it was more of a spinning top, which may be an indication of a turning point, but again the volatility came during a Fed meeting so we'll just have to wait and see if this indecision formation does what they tend to do. Reverse the trend.
BND (bonds / F-fund) had a "real" negative outside reversal day - again during a Fed meeting. The old resistance line held but this looks a little more serious and perhaps that open gap is about to get filled.
Thanks so much for reading! We'll see you back 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.
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