04/20/26
The Strait of Hormuz was opened on Friday and markets around the globe rallied as the price of oil plummeted. Volatility had come way down but that may get tested today after a weekend of turmoil and a game of chicken is being played as the negotiations for a ceasefire continue. The charts improved greatly but as they trade near their all time highs and the war continues, we could see some profit taking early this week.
Whether profit taking is the correct move is debatable because new highs tend to beget new highs, but double top pullbacks are also quite common. The action in the stock market has been very strong as fear turned into greed over the last few of weeks and whether things have come too far, too fast may be the question this morning for investors.
The price of oil dropped dramatically on Friday, but after a weekend of back and forth with Iran, this chart could turn out to be a bull flag, but it looks more like a bearish head and shoulders pattern, as we mentioned last week, and a right shoulder may need to form. The overnight futures were going for $90 and change last night.
And the stock market will likely come along for the ride, in the opposite direction. Oil up, stocks down. Oil down, stocks up.
If we shut off the noise of the back and forth negotiations and just look at the charts, the S&P 500 (C-fund) blasted through the all time highs last week, and how can you argue with that? It's bullish, but how long can stocks go straight up like this? In 2025 we saw a similar run up off the lows and there were only a couple of bouts of weakness, but they only lasted a few days to a week. This index chart includes the biggest tech stocks which have been doing really well lately, but...
... if we go to the Equal Weighted S&P 500 chart (same 500 stocks but not weighted by company size), we are seeing a possible double top formation. Double tops don't mean usually mean a market peak, but rather that a little profit taking could kick in and give us a temporary pullback.
The 10-year Treasury Yield remains in a bullish looking flag getting some support from the 50 and 200-day moving averages. If the price of oil moves back up on the failing negotiations with Iran, this could break to the upside. If a real deal is made, it would break down with oil, but I just can't see getting any firm commitment no matter what is agreed to.
The dollar has been trending lower but it found some support near the 200-day average late last week. The move off the highs has helped the I-fund lead the TSP fund again in April, after a devastating month of March. Whether that 27.1 area holds or not should tell us a lot about what is next for the I-fund. It would likely make a counter move.
The equities futures are down sharply as I write this on Sunday night after the chaotic weekend, but that happened last Sunday as well, and Monday ended up being a positive day for the stock market. The Oil futures are up about $6 to $90.
It's not a heavy week for key economic data, but the Magnificent 7 earnings will start this week and roll into next week.
Additional TSP Fund Charts:
DWCPF (S-fund) made a new all-time high on Friday after yet another good sized gap up. How many times have we talked about gaps and that they tend to get filled sooner rather than later. There tends to be exceptions when there's a trend changing newsworthy event, economic report, Fed action, etc, when stocks are coming off a bottom, but this third gap may be going a little too far and I would expect one or two of these to get filled in the not too distant future. The first one from a couple of weeks ago could take a while.
ACWX (I-fund) did what the other charts did, make a new high, but this one didn't close at a new high like the others. It filled in the gap from early March, tested the prior highs, and backed off, but it did gain 1.37% in the process on Friday. This has double top pullback written all over it, but in this fast moving, headline driven market cycle, I don't know if anything is going to be textbook.
BND (bonds / F-fund) rallied nicely on the decline in oil prices. It also gapped up and is now back above the large wedge formation. I won't bore you with too much "weedy" technical stuff, but I see some inverted head and shoulders patterns in here that could be looking bullish for bonds, but to be honest, my opinion of this chart and the 10-year Treasury yield have been going back and forth, so I'm not sure what to think.
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
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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 Strait of Hormuz was opened on Friday and markets around the globe rallied as the price of oil plummeted. Volatility had come way down but that may get tested today after a weekend of turmoil and a game of chicken is being played as the negotiations for a ceasefire continue. The charts improved greatly but as they trade near their all time highs and the war continues, we could see some profit taking early this week.
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Whether profit taking is the correct move is debatable because new highs tend to beget new highs, but double top pullbacks are also quite common. The action in the stock market has been very strong as fear turned into greed over the last few of weeks and whether things have come too far, too fast may be the question this morning for investors.
The price of oil dropped dramatically on Friday, but after a weekend of back and forth with Iran, this chart could turn out to be a bull flag, but it looks more like a bearish head and shoulders pattern, as we mentioned last week, and a right shoulder may need to form. The overnight futures were going for $90 and change last night.
And the stock market will likely come along for the ride, in the opposite direction. Oil up, stocks down. Oil down, stocks up.
If we shut off the noise of the back and forth negotiations and just look at the charts, the S&P 500 (C-fund) blasted through the all time highs last week, and how can you argue with that? It's bullish, but how long can stocks go straight up like this? In 2025 we saw a similar run up off the lows and there were only a couple of bouts of weakness, but they only lasted a few days to a week. This index chart includes the biggest tech stocks which have been doing really well lately, but...
... if we go to the Equal Weighted S&P 500 chart (same 500 stocks but not weighted by company size), we are seeing a possible double top formation. Double tops don't mean usually mean a market peak, but rather that a little profit taking could kick in and give us a temporary pullback.
The 10-year Treasury Yield remains in a bullish looking flag getting some support from the 50 and 200-day moving averages. If the price of oil moves back up on the failing negotiations with Iran, this could break to the upside. If a real deal is made, it would break down with oil, but I just can't see getting any firm commitment no matter what is agreed to.
The dollar has been trending lower but it found some support near the 200-day average late last week. The move off the highs has helped the I-fund lead the TSP fund again in April, after a devastating month of March. Whether that 27.1 area holds or not should tell us a lot about what is next for the I-fund. It would likely make a counter move.
The equities futures are down sharply as I write this on Sunday night after the chaotic weekend, but that happened last Sunday as well, and Monday ended up being a positive day for the stock market. The Oil futures are up about $6 to $90.
It's not a heavy week for key economic data, but the Magnificent 7 earnings will start this week and roll into next week.
Additional TSP Fund Charts:
DWCPF (S-fund) made a new all-time high on Friday after yet another good sized gap up. How many times have we talked about gaps and that they tend to get filled sooner rather than later. There tends to be exceptions when there's a trend changing newsworthy event, economic report, Fed action, etc, when stocks are coming off a bottom, but this third gap may be going a little too far and I would expect one or two of these to get filled in the not too distant future. The first one from a couple of weeks ago could take a while.
ACWX (I-fund) did what the other charts did, make a new high, but this one didn't close at a new high like the others. It filled in the gap from early March, tested the prior highs, and backed off, but it did gain 1.37% in the process on Friday. This has double top pullback written all over it, but in this fast moving, headline driven market cycle, I don't know if anything is going to be textbook.
BND (bonds / F-fund) rallied nicely on the decline in oil prices. It also gapped up and is now back above the large wedge formation. I won't bore you with too much "weedy" technical stuff, but I see some inverted head and shoulders patterns in here that could be looking bullish for bonds, but to be honest, my opinion of this chart and the 10-year Treasury yield have been going back and forth, so I'm not sure what to think.
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
Updated monthly:
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.
