10/20/25
Stocks rallied on Friday ending a tumultuous, yet profitable week for the stock market and the TSP funds. Small caps have been lagging the last few days but because of the gains earlier in the week, the S-fund actually outperformed the C-fund for the week, but it was the I-fund that led again. We saw yields move up giving the F-fund a small loss on Friday, but it too had a gain for the week.
We're not done with October yet. The volatile month has two weeks left and this week is actually one of the more volatile, and bearish weeks of the month historically. But it also happens to be the week that has seen market bottoms triggering the start of 4th quarter rallies.
Here is an X post by @neilksethi:
"On average, October 26th marks the Q4 low for the S&P 500, while October 27 marks the Q4 low for the Nasdaq 100."
"Late-October dips typically set up powerful year-end rallies. Strong years heading into Q4, typically have stronger moves higher into year-end."
Source
The stocks market got a little concerned when the 10-year Treasury Yield made a beeline for 4% and closed below it on Thursday for the first time in a long time. Low rates are good for the consumer, but sharply declining yields also bring up concerns about economic growth. It could have been a run to safety in bonds (bond prices go up when yields fall) because we have certainly seen a move into gold recently. That's another story, but when investors get nervous, bonds and gold come into play. Friday's move back above 4% on the 10 year Yield may have eased some concerns, but it is still right there and trending lower.
The S&P 500 (C-fund) has been churning within the large breakdown candlestick made the Friday before. So far it has remained above key support but with volatility still on the calendar, investors may be bracing for more wide swings this week. The 50-day EMA is currently near 6555 and that's the bull market tester. Strong markets should hold that level on the first test.
The Transportation Index retraced all of that Thursday / Friday (Oct 9-10) breakdown, and after four closes below the 50-day average, it has now closed above it for two days, but remains below descending resistance. This could be a telling week.
We did not get the PPI - Producer Price Index last week as was scheduled, and the CPI Report is due out on Friday of this week, but that remains in jeopardy. Maybe that's a good thing with the stock market so sensitive right now.
There's a lot going on here and abroad and the market, while choppy, is holding up fairly well so far with one week to go in the more volatile part of October, and the year. The futures opened positive on Sunday evening but Monday morning gaps can't always be trusted.
DWCPF Index (S-Fund) has been volatile and threatening to break down, but so far the key support levels are holding, however it wouldn't take much to break this chart this week.
ACWX was up on Friday but as we talked about on Friday, the inflated I-fund price given on Thursday was due for a negative adjustment, and we saw one with Friday's price. The chart looks good and the dollar is caught between some support and resistance right now.
BND (bonds / F-fund) was down on Friday but it did close above the blue resistance line again, as well as the September highs, so this is trying to confirm its recent breakout to new highs.
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
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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.
Stocks rallied on Friday ending a tumultuous, yet profitable week for the stock market and the TSP funds. Small caps have been lagging the last few days but because of the gains earlier in the week, the S-fund actually outperformed the C-fund for the week, but it was the I-fund that led again. We saw yields move up giving the F-fund a small loss on Friday, but it too had a gain for the week.
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We're not done with October yet. The volatile month has two weeks left and this week is actually one of the more volatile, and bearish weeks of the month historically. But it also happens to be the week that has seen market bottoms triggering the start of 4th quarter rallies.
Here is an X post by @neilksethi:
"On average, October 26th marks the Q4 low for the S&P 500, while October 27 marks the Q4 low for the Nasdaq 100."
"Late-October dips typically set up powerful year-end rallies. Strong years heading into Q4, typically have stronger moves higher into year-end."
Source
The stocks market got a little concerned when the 10-year Treasury Yield made a beeline for 4% and closed below it on Thursday for the first time in a long time. Low rates are good for the consumer, but sharply declining yields also bring up concerns about economic growth. It could have been a run to safety in bonds (bond prices go up when yields fall) because we have certainly seen a move into gold recently. That's another story, but when investors get nervous, bonds and gold come into play. Friday's move back above 4% on the 10 year Yield may have eased some concerns, but it is still right there and trending lower.
The S&P 500 (C-fund) has been churning within the large breakdown candlestick made the Friday before. So far it has remained above key support but with volatility still on the calendar, investors may be bracing for more wide swings this week. The 50-day EMA is currently near 6555 and that's the bull market tester. Strong markets should hold that level on the first test.
The Transportation Index retraced all of that Thursday / Friday (Oct 9-10) breakdown, and after four closes below the 50-day average, it has now closed above it for two days, but remains below descending resistance. This could be a telling week.
We did not get the PPI - Producer Price Index last week as was scheduled, and the CPI Report is due out on Friday of this week, but that remains in jeopardy. Maybe that's a good thing with the stock market so sensitive right now.
There's a lot going on here and abroad and the market, while choppy, is holding up fairly well so far with one week to go in the more volatile part of October, and the year. The futures opened positive on Sunday evening but Monday morning gaps can't always be trusted.
DWCPF Index (S-Fund) has been volatile and threatening to break down, but so far the key support levels are holding, however it wouldn't take much to break this chart this week.
ACWX was up on Friday but as we talked about on Friday, the inflated I-fund price given on Thursday was due for a negative adjustment, and we saw one with Friday's price. The chart looks good and the dollar is caught between some support and resistance right now.
BND (bonds / F-fund) was down on Friday but it did close above the blue resistance line again, as well as the September highs, so this is trying to confirm its recent breakout to new highs.
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.
