08/07/25
Thanks to a pop in Apple, the S&P 500 and Nasdaq had impressive gains as these indices recovered from Friday's jobs report sell off. The problem is, the broader market didn't celebrate with the same enthusiasm and the small caps of the Russell 2000 and the S-fund were flat on the day, and market breadth was actually negative. Bonds and the dollar were down, and the weakness in dollar did help give the I-fund a decent gain.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
Yesterday I said, "If we can get another 80% to 90% up volume day this week, that could change my skepticism because that would be a very bullish signal."
Yesterday looked like a very bullish day but it was far from an 80% to 90% up volume day. Despite the 1.2% gain in the Nasdaq on Wednesday, there were more stocks down on that exchange than up, and there were more 52-week new lows than new highs. The NYSE was also upside down with more stocks down than up, and trading volume was also negative. The Nasdaq volume was positive but that was because of the heavy trading in Apple and Amazon yesterday.
Is that a warning sign? Could be, but you usually want to see a trend rather than one upside down day, and while we have seen a very strong stock market this year, the advance / decline weekly data shows a negative divergence going back to October of last year as the S&P 500 makes higher highs while the A/D line made a lower high. We saw something similar before a pullback in 2023.
It's difficult to get too bearish in this environment because momentum is a formidable force for stocks and it is in the bulls' favor, so until we see the charts breaking down we probably want to keep something in the stocks market despite a few cracks showing. It could end up being just a short term opportunity to raise cash to buy a pullback, or it could be something severe but it's too soon to make that (severe) call.
The S&P 500 (C-fund) has bounced back to fill Friday's gap and regain the losses, but the top of that gap could hold as resistance, and I am still concerned about that negative outside reversal (NOR) day from last week.
Here is that negative outside reversal day (NOR.) We also technically have an open gap below at last Friday's close near 6230. And is that a bear fag forming - using the NOR day as the flag pole, and this week's move higher being the flag?
Retracing that flag pole wouldn't be unusual, but how the index reacts after doing so is the key. If this can get closer to that previous high from last Thursday, it could trigger some traders and investors to sell as they get their money back from that loss of the peak. I think we have about 100 points of wiggle room, meaning it could rollover here, or it could move up toward 6425 before it does. The other option is a breakout to new highs, which is possible, but we'll see how the internals shape up if we do get closer to 6425.
Apple was the reason for much of the gains yesterday as it pulled the Dow, S&P and Nasdaq up with it and it is 5.6% of the S&P 500. This looks like it is on the cusp of a breakout above a long consolidation period. A gap would get filled just above 220, which is also near the 200-day average.
The price of oil has fallen back down to that 64 area which has been a source of support and resistance since Liberation Day. It could bounce from here but if 64 can't hold, a break below it could mean a trip into the 50's is coming. Oil could be falling for a number of reasons, but one would be the threat of a weakening economy, which has become a concern since the latest jobs report was released.
After Friday's jobs report, the market has now priced in a 92% probability of two to three 0.25% rate cuts between now and the end of the year.
I've raised cash (G-fund) but I am not totally bearish yet, unless or until the charts tell us to be.
The DWCPF / S-fund was flat but it did reverse the morning losses to close near the highs of the day again. Getting that big bounce off the 50-day EMA was impressive, but now it faces some resistance, including the top of Friday's filled gap.
ACWX (I-fund) seems to be back in charge after the dollar (UUP) rolled over, which is now attempting to give back all of its recent gains.
The neckline of that inverted head and shoulders pattern on the UPP did not hold on the pullback, so it could be looking to fill that gap. Where it goes from there would be nice to know, but there is a lot of support near 27.20.
BND (bonds / F-fund) was down yesterday but it continues to cling near the recent highs so this seems to be leaning toward lower yields and higher bond prices. 73.10 looks like a good drop dead support area -meaning this remains bullish for bonds unless it falls below 73.10.
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.
Thanks to a pop in Apple, the S&P 500 and Nasdaq had impressive gains as these indices recovered from Friday's jobs report sell off. The problem is, the broader market didn't celebrate with the same enthusiasm and the small caps of the Russell 2000 and the S-fund were flat on the day, and market breadth was actually negative. Bonds and the dollar were down, and the weakness in dollar did help give the I-fund a decent gain.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
| Daily TSP Funds Return
More returns |
Yesterday I said, "If we can get another 80% to 90% up volume day this week, that could change my skepticism because that would be a very bullish signal."
Yesterday looked like a very bullish day but it was far from an 80% to 90% up volume day. Despite the 1.2% gain in the Nasdaq on Wednesday, there were more stocks down on that exchange than up, and there were more 52-week new lows than new highs. The NYSE was also upside down with more stocks down than up, and trading volume was also negative. The Nasdaq volume was positive but that was because of the heavy trading in Apple and Amazon yesterday.
Is that a warning sign? Could be, but you usually want to see a trend rather than one upside down day, and while we have seen a very strong stock market this year, the advance / decline weekly data shows a negative divergence going back to October of last year as the S&P 500 makes higher highs while the A/D line made a lower high. We saw something similar before a pullback in 2023.
It's difficult to get too bearish in this environment because momentum is a formidable force for stocks and it is in the bulls' favor, so until we see the charts breaking down we probably want to keep something in the stocks market despite a few cracks showing. It could end up being just a short term opportunity to raise cash to buy a pullback, or it could be something severe but it's too soon to make that (severe) call.
The S&P 500 (C-fund) has bounced back to fill Friday's gap and regain the losses, but the top of that gap could hold as resistance, and I am still concerned about that negative outside reversal (NOR) day from last week.
Here is that negative outside reversal day (NOR.) We also technically have an open gap below at last Friday's close near 6230. And is that a bear fag forming - using the NOR day as the flag pole, and this week's move higher being the flag?
Retracing that flag pole wouldn't be unusual, but how the index reacts after doing so is the key. If this can get closer to that previous high from last Thursday, it could trigger some traders and investors to sell as they get their money back from that loss of the peak. I think we have about 100 points of wiggle room, meaning it could rollover here, or it could move up toward 6425 before it does. The other option is a breakout to new highs, which is possible, but we'll see how the internals shape up if we do get closer to 6425.
Apple was the reason for much of the gains yesterday as it pulled the Dow, S&P and Nasdaq up with it and it is 5.6% of the S&P 500. This looks like it is on the cusp of a breakout above a long consolidation period. A gap would get filled just above 220, which is also near the 200-day average.
The price of oil has fallen back down to that 64 area which has been a source of support and resistance since Liberation Day. It could bounce from here but if 64 can't hold, a break below it could mean a trip into the 50's is coming. Oil could be falling for a number of reasons, but one would be the threat of a weakening economy, which has become a concern since the latest jobs report was released.
After Friday's jobs report, the market has now priced in a 92% probability of two to three 0.25% rate cuts between now and the end of the year.
I've raised cash (G-fund) but I am not totally bearish yet, unless or until the charts tell us to be.
The DWCPF / S-fund was flat but it did reverse the morning losses to close near the highs of the day again. Getting that big bounce off the 50-day EMA was impressive, but now it faces some resistance, including the top of Friday's filled gap.
ACWX (I-fund) seems to be back in charge after the dollar (UUP) rolled over, which is now attempting to give back all of its recent gains.
The neckline of that inverted head and shoulders pattern on the UPP did not hold on the pullback, so it could be looking to fill that gap. Where it goes from there would be nice to know, but there is a lot of support near 27.20.
BND (bonds / F-fund) was down yesterday but it continues to cling near the recent highs so this seems to be leaning toward lower yields and higher bond prices. 73.10 looks like a good drop dead support area -meaning this remains bullish for bonds unless it falls below 73.10.
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.
Last edited:
