03/10/26
The gains were impressive yesterday, but where those gains came from was the big story as the Dow was down 900 points in early trading, making it an 1100+ point reversal, and the S&P 500 closed 160-points off its lows. It was all due to a big reversal in the price of oil after comments from President Trump to CBS News saying, “the war is very complete, pretty much.”
The rebound erased a major morning sell off, and by the close it actually got back more than 60% of Friday's losses. That may be showing us how much of Friday's loss was due to the weak jobs report, and how much was about oil. The hit to employment and the economy will still have to be contemplated even if oil continues to ease back down.
That was all it took and the VIX (Volatility Index) came way off off its morning high, but it is still elevated so we might expect the swings in the S&P 500 and other indices to continue to be wide.
The price of oil tumbled from the 120 high and closed below 90 after President Trump's comments, and as for the Strait of Hormuz, which is still closed, the President said he is, “thinking about taking it over.” It probably wouldn't take much to get investors to lose confidence again, so I am assuming Trump will be choosing his words carefully.
That's all it took, and while it may not be as easy as it sounds, watch the charts and indicators for confirmation. As we said, with the VIX above 25, it probably won't be smooth sailing, unless that VIX comes crumbling down as well.
The S&P 500 (C-fund) did recapture the blue bull flag support line, but it fell short of the purple moving average, which had held as support for months prior to breaking down last week. Trading volume wasn't particularly high considering the dramatic losses in the overnight futures that led to a weak open, but once again the indices came off their lows pretty quickly, so it didn't feel panicky. Do we need to see panicky before it bottoms? Maybe not, but it may have been more comforting for the bulls.
The 10-year Treasury was up but it closed off its highs as it gets sandwiched in between the 50 and 200-day moving averages, and remains in that 4.1% to 4.2% range.
The dollar was down modestly as it cannot seem to get back above that 200-day moving average, but it hasn't fallen either.
The Transportation Index, which got a double whammy last week when the jobs report disappointed and the price of oil soared. Closing in positive territory after a successful test of the 100-day moving average is encouraging, but the old broken support may now act as resistance.
We have seen a lot of "V" bottoms in recent years - much more than the typical sell off, rebound, retest, "W" type bottom. "V" bottoms leave a lot of people behind and it can get frustrating if you're on the sidelines, and the market loves to frustrate market timers.
With the daylight savings time change, the TSP prices and the AutoTracker will be updated an hour later than usual - depending on where you are in the country. Some areas don't participate in daylight savings so it may not impact you, but the TSP doesn't change what time they update the prices with daylight savings.
Additional TSP Fund Charts:
DWCPF (S-fund) successfully tested the 200-day average yesterday, then came back to recapture the neckline of the head and shoulders pattern, but it is still in the area and it may be too early to declare victory for the bulls. The head and shoulders pattern downside target would have been much lower than yesterday's low, so it looks good, but it's still a wait and see as that target may still manifest.
ACWX gained over 1% yesterday. I am writing this before the TSP share prices are updated for Monday, so who knows what the TSP will give the I-fund after a volatile day with late gains in the US, but many of the overseas markets were closed by the time the reversal started. As for the chart, that is a positive outside reversal day, which is very promising.
BND (bonds / F-fund) rallied with yields falling. The support from the old broken resistance line held perfectly. Now, can it rebound back enough to fill those open gaps above?
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.
The gains were impressive yesterday, but where those gains came from was the big story as the Dow was down 900 points in early trading, making it an 1100+ point reversal, and the S&P 500 closed 160-points off its lows. It was all due to a big reversal in the price of oil after comments from President Trump to CBS News saying, “the war is very complete, pretty much.”
| Daily TSP Funds Return
More returns |
The rebound erased a major morning sell off, and by the close it actually got back more than 60% of Friday's losses. That may be showing us how much of Friday's loss was due to the weak jobs report, and how much was about oil. The hit to employment and the economy will still have to be contemplated even if oil continues to ease back down.
That was all it took and the VIX (Volatility Index) came way off off its morning high, but it is still elevated so we might expect the swings in the S&P 500 and other indices to continue to be wide.
The price of oil tumbled from the 120 high and closed below 90 after President Trump's comments, and as for the Strait of Hormuz, which is still closed, the President said he is, “thinking about taking it over.” It probably wouldn't take much to get investors to lose confidence again, so I am assuming Trump will be choosing his words carefully.
That's all it took, and while it may not be as easy as it sounds, watch the charts and indicators for confirmation. As we said, with the VIX above 25, it probably won't be smooth sailing, unless that VIX comes crumbling down as well.
The S&P 500 (C-fund) did recapture the blue bull flag support line, but it fell short of the purple moving average, which had held as support for months prior to breaking down last week. Trading volume wasn't particularly high considering the dramatic losses in the overnight futures that led to a weak open, but once again the indices came off their lows pretty quickly, so it didn't feel panicky. Do we need to see panicky before it bottoms? Maybe not, but it may have been more comforting for the bulls.
The 10-year Treasury was up but it closed off its highs as it gets sandwiched in between the 50 and 200-day moving averages, and remains in that 4.1% to 4.2% range.
The dollar was down modestly as it cannot seem to get back above that 200-day moving average, but it hasn't fallen either.
The Transportation Index, which got a double whammy last week when the jobs report disappointed and the price of oil soared. Closing in positive territory after a successful test of the 100-day moving average is encouraging, but the old broken support may now act as resistance.
We have seen a lot of "V" bottoms in recent years - much more than the typical sell off, rebound, retest, "W" type bottom. "V" bottoms leave a lot of people behind and it can get frustrating if you're on the sidelines, and the market loves to frustrate market timers.
With the daylight savings time change, the TSP prices and the AutoTracker will be updated an hour later than usual - depending on where you are in the country. Some areas don't participate in daylight savings so it may not impact you, but the TSP doesn't change what time they update the prices with daylight savings.
Additional TSP Fund Charts:
DWCPF (S-fund) successfully tested the 200-day average yesterday, then came back to recapture the neckline of the head and shoulders pattern, but it is still in the area and it may be too early to declare victory for the bulls. The head and shoulders pattern downside target would have been much lower than yesterday's low, so it looks good, but it's still a wait and see as that target may still manifest.
ACWX gained over 1% yesterday. I am writing this before the TSP share prices are updated for Monday, so who knows what the TSP will give the I-fund after a volatile day with late gains in the US, but many of the overseas markets were closed by the time the reversal started. As for the chart, that is a positive outside reversal day, which is very promising.
BND (bonds / F-fund) rallied with yields falling. The support from the old broken resistance line held perfectly. Now, can it rebound back enough to fill those open gaps above?
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.
