12/29/25
Stocks were down on Friday, a day between a holiday and a weekend so it had a setup for a perfect Santa Claus rally day, but it was not to be. The major indices were flat, so it wasn't all that bad, and the I-fund was actually positive, but small caps took a hit, and this is usually their time of year to shine. There's something big going on in the silver market, and before you say, who cares, it may have an impact on stocks very soon.
Like many analysts, I've been a little obsessed with the Santa Claus rally expectations, even though the prior two Santa Claus periods in 2023 and 2024, saw modest losses during the 7-trading day stretch. After two trading days (1.5, actually) of this year's SC period, the S&P 500 is up, but small caps are down. The I-fund is also positive. It's just an historic wind at the backs of the markets, and even if they are not positive, they probably performed better than they may have without that seasonal boost.
Today is Monday and, with Friday's trading volume about half that of a regular day, Thursday being a off day, and Wednesday a half day of trading on Christmas Eve, we haven't had a "real" full day of trading since last Tuesday, and a lot has happened since then - outside of the normal investment channels.
It's been in the silver market. This may start to creep into the stock market as investors become more aware of the ramifications of a move like this. I don't fully understand those ramifications, but listening to the scuttlebutt online, I am hearing that the "suppression machine" that has been keeping the price of silver artificially low for decades, is cracking.
Prior peaks have been accompanied by trading volume near 300 million shares traded in SLV in 2011 and 2021. Friday's spike over $76 came on volume of less than 150 million. Of course 150 million shares at $76 / oz is more money that 275 million shares at $26 / oz.
There have always been huge short positions in silver that has kept the price down and occasionally, as you'll see in this 50 year chart, it has had a couple of outlier spikes and short squeezes. The prior two came right back down, but some say "it's different this time", although it rarely ever is.
I can't do the story justice, but you can read about it here, and why some think it is different.
x.com/FreedomStocks/status/2004698731820843344
Yada, yada, yada, the CME is raising margin requirements to perhaps force some selling, banks could be in some trouble holding short positions, but the financial system may be getting another boost in liquidity from the Fed because of this, and that usually benefits all assets, including stocks.
Additional liquidity could have a negative impact on the dollar, which is why asset prices would go up. Right now the dollar is in a downtrend, but the UUP is sitting on the 200-day average, looking for that support to hold.
A weaker dollar usually benefits the I-fund the most and ACWX (I-fund) as been benefiting this year with its 33% gain this year. Phenomenal!
But can that continue?
The data below shows 20+ years of the return of the C and I-funds with the last column showing the I-fund's performance compared to the C-fund (S&P 500) - a negative number means the C fund outperformed that year.
This will be only the 5th year that the I-fund outperformed the C-fund since 2008. That's 18 years, and there weren't two consecutive years during that entire period. However, from 2002 to 2007 the I-fund outperformed the C-fund every year. That's pre and post financial crisis.
Silver futures were up another 5.8% to $81 as I write this Sunday evening, the dollar was flat, and the stock index futures were up just slightly.
There will be a lot of economic data coming out this week, but it should be lighter than normal trading volume, unless something interesting happens, such as more chaos in the silver market. But keep an eye on silver. If nothing else it will be entertaining to watch both the shorts, and the FOMO's, panic trade.
The S&P 500 (C-fund) had one of those spinning top days, and indecision can bring about reversals, but there's a lot going on this week, and depending on the reaction to the silver short squeeze, it could be more volatile than we might like this time of year. It's above all of the tough resistance after breaking out last week, but there is an open gap near 6830 if it does want to pull back.
DWCPF (S-fund) has been holding steady, filled an open gap and created what looks like a bull flag, but that resistance line near 2575 has been a tough nut to crack. I like the look, but I'm concerned about what could happen if trading volume is light and the silver situation gets dicey.
BND (bonds / F-fund) was flat so again it couldn't close above that 74.2 area after an attempt to fill the open gap from December 1st. It's trending higher, remains above the 50-day average, and looks to be heading toward another test of the recent highs, but that silver trade and the possible Fed intervention could stimulate inflation concerns again, which would weigh on this chart.
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.
Stocks were down on Friday, a day between a holiday and a weekend so it had a setup for a perfect Santa Claus rally day, but it was not to be. The major indices were flat, so it wasn't all that bad, and the I-fund was actually positive, but small caps took a hit, and this is usually their time of year to shine. There's something big going on in the silver market, and before you say, who cares, it may have an impact on stocks very soon.
| Daily TSP Funds Return
More returns |
Like many analysts, I've been a little obsessed with the Santa Claus rally expectations, even though the prior two Santa Claus periods in 2023 and 2024, saw modest losses during the 7-trading day stretch. After two trading days (1.5, actually) of this year's SC period, the S&P 500 is up, but small caps are down. The I-fund is also positive. It's just an historic wind at the backs of the markets, and even if they are not positive, they probably performed better than they may have without that seasonal boost.
Today is Monday and, with Friday's trading volume about half that of a regular day, Thursday being a off day, and Wednesday a half day of trading on Christmas Eve, we haven't had a "real" full day of trading since last Tuesday, and a lot has happened since then - outside of the normal investment channels.
It's been in the silver market. This may start to creep into the stock market as investors become more aware of the ramifications of a move like this. I don't fully understand those ramifications, but listening to the scuttlebutt online, I am hearing that the "suppression machine" that has been keeping the price of silver artificially low for decades, is cracking.
Prior peaks have been accompanied by trading volume near 300 million shares traded in SLV in 2011 and 2021. Friday's spike over $76 came on volume of less than 150 million. Of course 150 million shares at $76 / oz is more money that 275 million shares at $26 / oz.
There have always been huge short positions in silver that has kept the price down and occasionally, as you'll see in this 50 year chart, it has had a couple of outlier spikes and short squeezes. The prior two came right back down, but some say "it's different this time", although it rarely ever is.
I can't do the story justice, but you can read about it here, and why some think it is different.
x.com/FreedomStocks/status/2004698731820843344
Yada, yada, yada, the CME is raising margin requirements to perhaps force some selling, banks could be in some trouble holding short positions, but the financial system may be getting another boost in liquidity from the Fed because of this, and that usually benefits all assets, including stocks.
Additional liquidity could have a negative impact on the dollar, which is why asset prices would go up. Right now the dollar is in a downtrend, but the UUP is sitting on the 200-day average, looking for that support to hold.
A weaker dollar usually benefits the I-fund the most and ACWX (I-fund) as been benefiting this year with its 33% gain this year. Phenomenal!
But can that continue?
The data below shows 20+ years of the return of the C and I-funds with the last column showing the I-fund's performance compared to the C-fund (S&P 500) - a negative number means the C fund outperformed that year.
This will be only the 5th year that the I-fund outperformed the C-fund since 2008. That's 18 years, and there weren't two consecutive years during that entire period. However, from 2002 to 2007 the I-fund outperformed the C-fund every year. That's pre and post financial crisis.
Silver futures were up another 5.8% to $81 as I write this Sunday evening, the dollar was flat, and the stock index futures were up just slightly.
There will be a lot of economic data coming out this week, but it should be lighter than normal trading volume, unless something interesting happens, such as more chaos in the silver market. But keep an eye on silver. If nothing else it will be entertaining to watch both the shorts, and the FOMO's, panic trade.
The S&P 500 (C-fund) had one of those spinning top days, and indecision can bring about reversals, but there's a lot going on this week, and depending on the reaction to the silver short squeeze, it could be more volatile than we might like this time of year. It's above all of the tough resistance after breaking out last week, but there is an open gap near 6830 if it does want to pull back.
DWCPF (S-fund) has been holding steady, filled an open gap and created what looks like a bull flag, but that resistance line near 2575 has been a tough nut to crack. I like the look, but I'm concerned about what could happen if trading volume is light and the silver situation gets dicey.
BND (bonds / F-fund) was flat so again it couldn't close above that 74.2 area after an attempt to fill the open gap from December 1st. It's trending higher, remains above the 50-day average, and looks to be heading toward another test of the recent highs, but that silver trade and the possible Fed intervention could stimulate inflation concerns again, which would weigh on this chart.
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.
