03/23/26
The stock market continues to take its cues from the price of oil and the action in the Middle East, and for the second year in a row, March Madness has been just that for the stock market. Sky rocketing oil prices and bond yields is not a great recipe for financial markets' success, as the bond market also suffers with yields pushing to levels not seen since last summer. The Fed meeting last week didn't give the bulls any optimism.
The price of oil is sitting near $100, and as of now that remains vulnerable to a either another spike higher, or a rapid decline, depending on how this plays out, so both sides of the stock market are vulnerable to large, quick moves. The bears have the momentum but we are seeing key support levels being tested now which can lead to either a rebound, or another more serious leg lower.
The rising support line on WTIC oil was broken, but a bull flag may be waving. Typical technical action could see this retesting the March 9 highs, or it could rollover back toward the pre-wartime levels, and the stock market is going to go along for the ride in the other direction.
Serious threats from President Trump over the weekend, and retaliatory threats from Iran, may put more pressure on oil to start the week, although recently the market has done well early in the week, then faded later in the week.
The 10-year Treasury Yield did breakout from its inverted head and shoulders pattern. So much for digesting inside the right shoulder for a while. It was emphatic.
4.4% isn't an unusually high level, but it got their rapidly and money managers are adjusting their portfolios accordingly.
The S&P 500 (C-fund) fell below key levels and when you get a market like this we have to decide whether we believe this breakdown is a door opening to another leg lower, or an opportunity to be buying at lower levels. As of now the S&P 500 is still down just about 5% for the year, but the question is whether 5% is leading to 10%, or more, and the 200-day averaging breaking is waking up some investors to that concern.
Friday was a high volume trading day on an expiration Friday. Not always, but sometimes these expiration Fridays can be turning points, but clearly oil and the geopolitical events are calling the shots. Not tendencies.
The 200-day moving average breaking brings out the question of whether this is the end of the pullback, or the start of a more serious correction or even a bear market. The yellow areas on the chart below from @neilksethi on X, shows the times where the 200-day average was a buying opportunity, and the red where it broke down further. There's more yellow but the red areas are dramatically lower so they are tough to ignore.
Source:@neilksethi
"There are plenty of examples where a break led to more downside, but just as many, if not more, where it created a buying opportunity instead. - There's no use in trying to guess which outcome this will be after just [two days]. It always comes down to the follow-through and the patterns that develop from here "
As we discussed for many weeks, we've had 7 Hindenburg Omen Signal warnings and the bearish Wyckoff Distribution pattern played out right in front of our eyes. It was slow and from experience we know that the stock market can ignore these types of warnings and can snap back quickly, but they seemed to have been legitimate this time around.
Wyckoff Distribution pattern
If you are beating yourself up over what to do, know that you are not alone. These are never easy calls, but we know that history suggests that President Trump has a pattern of taking action that helps perpetrate these declines, but they tend to come back quickly once resolved. Last year's Tariff Tantrum and the 2020 bear markets were a couple of examples.
Friday did some damage. The S and I-funds were positive for the week until Friday's big losses. The I-fund was up 12.4% near the end of February, and now it is a few ticks into the red. The C-fund is now down 4.7% for the year, and the S-fund is off 3.2%.
Additional TSP Fund Charts:
DWCPF (S-fund) continues the head and shoulders pattern breakdown, and it is already close to the first downside target, which is about 2375. That doesn't have to be the low, just an initial technical target - but it could be. Below the 200-day average and in a downtrend however, is not a pretty picture, although the fear levels are high and so are the odds of a relief rally.
ACWX (I-fund) gave us a warning sign when it broke below its blue trading channel. However the decline was so swift after that initial break, it took most investors by surprise after months of outperforming. Now it is looking for relief at support, and there actually is plenty of that in the area.
BND (bonds / F-fund) has collapsed in March. That may be hyperbolic, but that was clearly a big move in the last three weeks, and it was basically straight down. Again, probably due for some relief, but the chart looks bad below broken support.
72.50 - 73.0 look like potential targets.
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 stock market continues to take its cues from the price of oil and the action in the Middle East, and for the second year in a row, March Madness has been just that for the stock market. Sky rocketing oil prices and bond yields is not a great recipe for financial markets' success, as the bond market also suffers with yields pushing to levels not seen since last summer. The Fed meeting last week didn't give the bulls any optimism.
| Daily TSP Funds Return
More returns |
The price of oil is sitting near $100, and as of now that remains vulnerable to a either another spike higher, or a rapid decline, depending on how this plays out, so both sides of the stock market are vulnerable to large, quick moves. The bears have the momentum but we are seeing key support levels being tested now which can lead to either a rebound, or another more serious leg lower.
The rising support line on WTIC oil was broken, but a bull flag may be waving. Typical technical action could see this retesting the March 9 highs, or it could rollover back toward the pre-wartime levels, and the stock market is going to go along for the ride in the other direction.
Serious threats from President Trump over the weekend, and retaliatory threats from Iran, may put more pressure on oil to start the week, although recently the market has done well early in the week, then faded later in the week.
The 10-year Treasury Yield did breakout from its inverted head and shoulders pattern. So much for digesting inside the right shoulder for a while. It was emphatic.
4.4% isn't an unusually high level, but it got their rapidly and money managers are adjusting their portfolios accordingly.
The S&P 500 (C-fund) fell below key levels and when you get a market like this we have to decide whether we believe this breakdown is a door opening to another leg lower, or an opportunity to be buying at lower levels. As of now the S&P 500 is still down just about 5% for the year, but the question is whether 5% is leading to 10%, or more, and the 200-day averaging breaking is waking up some investors to that concern.
Friday was a high volume trading day on an expiration Friday. Not always, but sometimes these expiration Fridays can be turning points, but clearly oil and the geopolitical events are calling the shots. Not tendencies.
The 200-day moving average breaking brings out the question of whether this is the end of the pullback, or the start of a more serious correction or even a bear market. The yellow areas on the chart below from @neilksethi on X, shows the times where the 200-day average was a buying opportunity, and the red where it broke down further. There's more yellow but the red areas are dramatically lower so they are tough to ignore.
Source:@neilksethi
"There are plenty of examples where a break led to more downside, but just as many, if not more, where it created a buying opportunity instead. - There's no use in trying to guess which outcome this will be after just [two days]. It always comes down to the follow-through and the patterns that develop from here "
As we discussed for many weeks, we've had 7 Hindenburg Omen Signal warnings and the bearish Wyckoff Distribution pattern played out right in front of our eyes. It was slow and from experience we know that the stock market can ignore these types of warnings and can snap back quickly, but they seemed to have been legitimate this time around.
Wyckoff Distribution pattern
If you are beating yourself up over what to do, know that you are not alone. These are never easy calls, but we know that history suggests that President Trump has a pattern of taking action that helps perpetrate these declines, but they tend to come back quickly once resolved. Last year's Tariff Tantrum and the 2020 bear markets were a couple of examples.
Friday did some damage. The S and I-funds were positive for the week until Friday's big losses. The I-fund was up 12.4% near the end of February, and now it is a few ticks into the red. The C-fund is now down 4.7% for the year, and the S-fund is off 3.2%.
Additional TSP Fund Charts:
DWCPF (S-fund) continues the head and shoulders pattern breakdown, and it is already close to the first downside target, which is about 2375. That doesn't have to be the low, just an initial technical target - but it could be. Below the 200-day average and in a downtrend however, is not a pretty picture, although the fear levels are high and so are the odds of a relief rally.
ACWX (I-fund) gave us a warning sign when it broke below its blue trading channel. However the decline was so swift after that initial break, it took most investors by surprise after months of outperforming. Now it is looking for relief at support, and there actually is plenty of that in the area.
BND (bonds / F-fund) has collapsed in March. That may be hyperbolic, but that was clearly a big move in the last three weeks, and it was basically straight down. Again, probably due for some relief, but the chart looks bad below broken support.
72.50 - 73.0 look like potential targets.
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.
