09/22/25
Friday saw a bullish end to another bullish week for the stock market, a week that had the Federal reserve cut interest rates for the first time in a year. Whether we think the Fed should or shouldn't have cut the interest rates is moot at this point. It's happening, and the stock market sees it as a good thing. Why they are cutting may be the relevant discussion as we analyze the current economic picture.
Small caps lagged on Friday after a third straight move up in the 10-Year Treasury Yield, but to me the gain in that yield looks like a relief rally within a descending trading channel with a gap to fill, and perhaps a test of the the top of the channel in the works. Bonds were experiencing a sell the news reaction (bond prices go down when yields move up.)
The I-fund also lagged on Friday (that chart will be posted down below) as the dollar also started to rally after the Fed cut rates. The dollar is pushing against some descending resistance and if broken, may be eying the large open gap near 27.80.
Here's what the bond market is basically forecasting for interest rates over the next year or so.
Easy, cheaper money is what bull markets are built on. Should rates be lowered, should M2 Money being increasing? Doesn't matter to us, we only need to know that it is.
Does that means stocks will go up every day, week, and month until then? Not a chance. They (the market, traders, investors, money managers, etc.) will pull the rug out from under us occasionally on news headlines, economic data, Fed speak, etc., but the wind remains at the bulls' back for a while.
The S&P 500 / C-fund made four new intraday highs in five days last week, and the week ended at a new all time high. It is trading near the top of the ascending channel again so it is a little vulnerable, but like in July, it can continue higher while keeping below the rising resistance. On the other hand it could rollover to test the bottom of the channel as it did a few times in August.
You can see that spike in trading volume on Friday in the charts above and below. It was an expiration Friday where option and futures contracts expired. Often these can be turning points for the short-term, or they can just magnify the current direction. It's like a relief valve being released. Last September the expiration Friday didn't have much of an impact but the S&P had just experienced major reversals in both early August and earlier that month in September.
In June there was a very modest pullback occurring just below the expiration Friday and once that passed, the rally off the April lows moved into another gear higher. In March a relief rally off the February highs ran out of steam, and the downside resumed. So, it's not consistent, but something tends to change.
You can see that rally off the April low has brought it back near with the ascending trend it was in before the tariff tantrum. But it has done so extremely quickly with few hiccups along the way. At some point they will try to shake the bulls out again.
Like sell in May and go away, there is another old saying on Wall Street about this time of year: Sell Rosh Hashanah and buy Yom Kippur. During those two holidays, the average return of the S&P 500 since 1971 is -0.04% with 23 years being positive and 31 being down. This year it will start on September 23 and end on October 2.
The potential for a government shutdown is back and with the market perhaps looking for an excuse to pull back, maybe we will see some effect, but realistically the stock market has yawned at these in the past. The deadline to make a deal is September 30.
The DWCPF (S-fund) made another new intraday high on Friday before reversing downward on the pressure of higher yields. It is trying to take it to another level but the angle of incline suggests some backing and filling would not be much of a surprise.
ACWX (I-fund) slipped lower on Friday as the dollar (UUP) has been moving upward after the Fed day sell off. Like the S-fund above, this is doing well, but there is plenty of room on the downside if these needs to pullback and build a better base after the recent direct move up from 62 to 65.
BND (bonds / F-fund) was up slightly on Friday but basically flat as it tries to recapture the resistance line it gave up on Thursday. The gap near 74 remains open and it would be nice and clean to fill that gap before resuming the upside. This Friday's PCE Prices report could shake things up here.
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 may use additional methods and strategies to determine fund positions.
Friday saw a bullish end to another bullish week for the stock market, a week that had the Federal reserve cut interest rates for the first time in a year. Whether we think the Fed should or shouldn't have cut the interest rates is moot at this point. It's happening, and the stock market sees it as a good thing. Why they are cutting may be the relevant discussion as we analyze the current economic picture.
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Small caps lagged on Friday after a third straight move up in the 10-Year Treasury Yield, but to me the gain in that yield looks like a relief rally within a descending trading channel with a gap to fill, and perhaps a test of the the top of the channel in the works. Bonds were experiencing a sell the news reaction (bond prices go down when yields move up.)
The I-fund also lagged on Friday (that chart will be posted down below) as the dollar also started to rally after the Fed cut rates. The dollar is pushing against some descending resistance and if broken, may be eying the large open gap near 27.80.
Here's what the bond market is basically forecasting for interest rates over the next year or so.
Easy, cheaper money is what bull markets are built on. Should rates be lowered, should M2 Money being increasing? Doesn't matter to us, we only need to know that it is.
Does that means stocks will go up every day, week, and month until then? Not a chance. They (the market, traders, investors, money managers, etc.) will pull the rug out from under us occasionally on news headlines, economic data, Fed speak, etc., but the wind remains at the bulls' back for a while.
The S&P 500 / C-fund made four new intraday highs in five days last week, and the week ended at a new all time high. It is trading near the top of the ascending channel again so it is a little vulnerable, but like in July, it can continue higher while keeping below the rising resistance. On the other hand it could rollover to test the bottom of the channel as it did a few times in August.
You can see that spike in trading volume on Friday in the charts above and below. It was an expiration Friday where option and futures contracts expired. Often these can be turning points for the short-term, or they can just magnify the current direction. It's like a relief valve being released. Last September the expiration Friday didn't have much of an impact but the S&P had just experienced major reversals in both early August and earlier that month in September.
In June there was a very modest pullback occurring just below the expiration Friday and once that passed, the rally off the April lows moved into another gear higher. In March a relief rally off the February highs ran out of steam, and the downside resumed. So, it's not consistent, but something tends to change.
You can see that rally off the April low has brought it back near with the ascending trend it was in before the tariff tantrum. But it has done so extremely quickly with few hiccups along the way. At some point they will try to shake the bulls out again.
Like sell in May and go away, there is another old saying on Wall Street about this time of year: Sell Rosh Hashanah and buy Yom Kippur. During those two holidays, the average return of the S&P 500 since 1971 is -0.04% with 23 years being positive and 31 being down. This year it will start on September 23 and end on October 2.
The potential for a government shutdown is back and with the market perhaps looking for an excuse to pull back, maybe we will see some effect, but realistically the stock market has yawned at these in the past. The deadline to make a deal is September 30.
The DWCPF (S-fund) made another new intraday high on Friday before reversing downward on the pressure of higher yields. It is trying to take it to another level but the angle of incline suggests some backing and filling would not be much of a surprise.
ACWX (I-fund) slipped lower on Friday as the dollar (UUP) has been moving upward after the Fed day sell off. Like the S-fund above, this is doing well, but there is plenty of room on the downside if these needs to pullback and build a better base after the recent direct move up from 62 to 65.
BND (bonds / F-fund) was up slightly on Friday but basically flat as it tries to recapture the resistance line it gave up on Thursday. The gap near 74 remains open and it would be nice and clean to fill that gap before resuming the upside. This Friday's PCE Prices report could shake things up here.
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.
