09/19/25
Stocks resumed their rally on Thursday after the hiccup on Fed day. Trading volume was solid, market breadth was good, and the rally occurred when both yields and the dollar were moving higher. That's quite impressive. Sustainable? I don't know, but the bulls have been in complete charge and the rate cuts don't hurt their argument.
Yesterday was a big day for the bulls with lopsided bullish breadth despite a classic set up for a sell the news reaction to the Fed's first interest rate cut in a year. The Nasdaq looked particularly healthy with advancing volume outpacing declining by 3 to 1, and there were 437 new highs made on the index.
That was occurring as the 10-year Treasury Yield rallied back over 4.1%. It had been due for a rebound and perhaps a gap fill near 4.16%, but we'll have to see if the bond market, which goes down when yields go up, can stop its sell the news reaction to the Fed's interest rate cut.
The dollar continued Wednesday's positive reversal with another big gain, and now it is testing some crucial resistance by the 50-day moving average, and the descending resistance line. The strength in the dollar did hold back the I-fund and commodities yesterday, but not the US stock market.
The S&P 500 / C-fund made yet another new high, which we have been seeing almost daily in recent trading. The resistance is still in the picture as the S&P failed to close above that double dose of intersecting resistance lines. Both lines are moving higher so the index can continue to crawl higher while remaining below those resistance line, but at some point, you would think, history suggests some backing and filling will be coming. Yesterday's candlestick was another spinning top, which could be a reversal formation, but the bulls have been throwing the bears false hope for months now.
I thought this chart was interesting. Something happened in late 2022 or early 2023 where the correlation between job openings and the S&P 500 diverged, and they've been moving in different directions ever since. Is this the new normal or will something have to give?
Source: x.com
Thursday's action was impressive, but be careful here. It's getting a little frothy. Not exactly dot com bubble frothy yet, but still up there with some other overbought peaks. The market doesn't have to crash, but backing and filling from profit taking may not be too far off.
The DWCPF (S-fund) had a great day yesterday despite the rally in yields. It's not like we didn't know interest rates were going to be cut so this is bold move where it could have easily been a sell the news reaction.
I believe I mentioned this here before - I know I mentioned it to the TSP Talk Plus subscribers, but the market still has this interesting piece of information hanging over its head. That is, "Representative Tim Moore, a member of the House Financial Services Committee, disclosed new trades showing a leveraged bet against U.S. small-cap stocks. The filings highlight recent purchases of a triple-leveraged bearish ETF tied to the Russell 2000 Index." - Source
A 3X bet against stocks is an unusual position for an average investor to take -- unless maybe you know something. And in his committee position, my guess is he knows something that we don't. The trade was put on in late August so it has not worked out for Tim yet.
ACWX (I-fund) was up slightly on Thursday but the 0.48% gain in the dollar put too much pressure on the I-fund and it couldn't keep pace with US stocks.
BND (bonds / F-fund) pulled back yesterday with yields moving up again, but we knew that open gap near 74 was going to be tough to ignore. It looks like the 73.80 area on BND may be the support that must hold for the F-fund, although the 50-day EMA is also just below near73.50.
Thanks so much for reading! Have a great weekend!
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.
Stocks resumed their rally on Thursday after the hiccup on Fed day. Trading volume was solid, market breadth was good, and the rally occurred when both yields and the dollar were moving higher. That's quite impressive. Sustainable? I don't know, but the bulls have been in complete charge and the rate cuts don't hurt their argument.
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Yesterday was a big day for the bulls with lopsided bullish breadth despite a classic set up for a sell the news reaction to the Fed's first interest rate cut in a year. The Nasdaq looked particularly healthy with advancing volume outpacing declining by 3 to 1, and there were 437 new highs made on the index.
That was occurring as the 10-year Treasury Yield rallied back over 4.1%. It had been due for a rebound and perhaps a gap fill near 4.16%, but we'll have to see if the bond market, which goes down when yields go up, can stop its sell the news reaction to the Fed's interest rate cut.
The dollar continued Wednesday's positive reversal with another big gain, and now it is testing some crucial resistance by the 50-day moving average, and the descending resistance line. The strength in the dollar did hold back the I-fund and commodities yesterday, but not the US stock market.
The S&P 500 / C-fund made yet another new high, which we have been seeing almost daily in recent trading. The resistance is still in the picture as the S&P failed to close above that double dose of intersecting resistance lines. Both lines are moving higher so the index can continue to crawl higher while remaining below those resistance line, but at some point, you would think, history suggests some backing and filling will be coming. Yesterday's candlestick was another spinning top, which could be a reversal formation, but the bulls have been throwing the bears false hope for months now.
I thought this chart was interesting. Something happened in late 2022 or early 2023 where the correlation between job openings and the S&P 500 diverged, and they've been moving in different directions ever since. Is this the new normal or will something have to give?
Source: x.com
Thursday's action was impressive, but be careful here. It's getting a little frothy. Not exactly dot com bubble frothy yet, but still up there with some other overbought peaks. The market doesn't have to crash, but backing and filling from profit taking may not be too far off.
The DWCPF (S-fund) had a great day yesterday despite the rally in yields. It's not like we didn't know interest rates were going to be cut so this is bold move where it could have easily been a sell the news reaction.
I believe I mentioned this here before - I know I mentioned it to the TSP Talk Plus subscribers, but the market still has this interesting piece of information hanging over its head. That is, "Representative Tim Moore, a member of the House Financial Services Committee, disclosed new trades showing a leveraged bet against U.S. small-cap stocks. The filings highlight recent purchases of a triple-leveraged bearish ETF tied to the Russell 2000 Index." - Source
A 3X bet against stocks is an unusual position for an average investor to take -- unless maybe you know something. And in his committee position, my guess is he knows something that we don't. The trade was put on in late August so it has not worked out for Tim yet.
ACWX (I-fund) was up slightly on Thursday but the 0.48% gain in the dollar put too much pressure on the I-fund and it couldn't keep pace with US stocks.
BND (bonds / F-fund) pulled back yesterday with yields moving up again, but we knew that open gap near 74 was going to be tough to ignore. It looks like the 73.80 area on BND may be the support that must hold for the F-fund, although the 50-day EMA is also just below near73.50.
Thanks so much for reading! Have a great weekend!
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.
