03/13/26
Stocks couldn't withstand another jump in oil prices on Thursday, and we saw the indices sell off again with many charts starting to test the previous lows. Once again gold and bonds were down, so that is not the safety trade. Nearly the only game in town right now, besides shorting the stock market, is being long oil and oil related stocks.
The price of oil is reaching toward 100 again after falling from a high of 120 down to the mid-70's just a couple of days ago, but the threat in the Strait of Hormuz has not let up, and here it is retracing some of that pullback. If we cross out oil and look at this chart like any other parabolic move, such as silver recently, we know this is not unusual action for trading and pricing. So, along with the turmoil in the Middle East, there are a lot of traders making and losing money in this volatile oil market, and fear and greed are playing out.
There is some long-term resistance near Monday's highs, and these spikes do tend to come back down, assuming a resolution in the not so distant future, and what will that do to stock prices if this falls as quickly as it went up, as it did the prior times?
Higher oil prices are helping to push yields higher as inflation becomes a concern again. The 10-year Treasury Yield is nearing the highs from earlier this year.
The recent rally has pushed it just above the descending resistance line going back over a year.
This is now going to put pressure on the Fed as the concern for inflation is dramatically reducing the chances of multiple, or even one, Fed rate cut this year. A month ago there was only a 5% chance that the Fed was NOT going to cut this year. This has moved up a 43% chance of no cut. That has almost doubled since Wednesday. The odds of multiple cuts this year has gone from a 75% chance, down to a 17% chance.
The S&P 500 (C-fund) is testing Monday's lows and it made its lowest close of the year. There is an open gap down near 600, and the 200-day moving average is just below that. That could be a target and any overshoot may be an opportunity -- or a warning sign if it can't hold.
The Transportation Index took another hit as higher fuel prices weight on many companies in this leading index.
The longer term chart does show some possible support in the area, as the lower end of that channel appears to be a key pivot point.
Does anything else matter but oil? We'll find out as this morning when we will get the PCE prices inflation data.
Additional TSP Fund Charts:
DWCPF (S-fund) closed below its neckline of the head and shoulders and now it is below the 200-day average. Both are warning signs, and as I mentioned a couple of times this week, the head and shoulders break down target is quite a bit lower. If there is a silver lining, the lightly traded DWCPF chart isn't as susceptible to chart patterns, but I have to admit that the head and shoulders pattern is a textbook example of that pattern.
ACWX (I-fund) also lost 2% but it is trying to hang onto some support at the orange 100-day average. It's not typical to see a roaring market turn completely bearish without warning, so I will assume the bulls will make another run at this, even if it eventually fails. It may even run up just enough to get everyone back in, then rollover again. Not sure, but this is a little odd and headline driven sell offs tend to bounce back quickly.
BND (bonds / F-fund) sank again and this time it moved down to the bottom of the channel / wedge-like formation, and filled an open gap. Like the I-fund chart above, this has been quite a turnaround. There was no questionable period - just bullish, to bearish for bonds. Let's see if support near 74.50 can hold here.
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 use additional methods and strategies to determine fund positions.
Stocks couldn't withstand another jump in oil prices on Thursday, and we saw the indices sell off again with many charts starting to test the previous lows. Once again gold and bonds were down, so that is not the safety trade. Nearly the only game in town right now, besides shorting the stock market, is being long oil and oil related stocks.
| Daily TSP Funds Return More returns |
The price of oil is reaching toward 100 again after falling from a high of 120 down to the mid-70's just a couple of days ago, but the threat in the Strait of Hormuz has not let up, and here it is retracing some of that pullback. If we cross out oil and look at this chart like any other parabolic move, such as silver recently, we know this is not unusual action for trading and pricing. So, along with the turmoil in the Middle East, there are a lot of traders making and losing money in this volatile oil market, and fear and greed are playing out.
There is some long-term resistance near Monday's highs, and these spikes do tend to come back down, assuming a resolution in the not so distant future, and what will that do to stock prices if this falls as quickly as it went up, as it did the prior times?
Higher oil prices are helping to push yields higher as inflation becomes a concern again. The 10-year Treasury Yield is nearing the highs from earlier this year.
The recent rally has pushed it just above the descending resistance line going back over a year.
This is now going to put pressure on the Fed as the concern for inflation is dramatically reducing the chances of multiple, or even one, Fed rate cut this year. A month ago there was only a 5% chance that the Fed was NOT going to cut this year. This has moved up a 43% chance of no cut. That has almost doubled since Wednesday. The odds of multiple cuts this year has gone from a 75% chance, down to a 17% chance.
The S&P 500 (C-fund) is testing Monday's lows and it made its lowest close of the year. There is an open gap down near 600, and the 200-day moving average is just below that. That could be a target and any overshoot may be an opportunity -- or a warning sign if it can't hold.
The Transportation Index took another hit as higher fuel prices weight on many companies in this leading index.
The longer term chart does show some possible support in the area, as the lower end of that channel appears to be a key pivot point.
Does anything else matter but oil? We'll find out as this morning when we will get the PCE prices inflation data.
Additional TSP Fund Charts:
DWCPF (S-fund) closed below its neckline of the head and shoulders and now it is below the 200-day average. Both are warning signs, and as I mentioned a couple of times this week, the head and shoulders break down target is quite a bit lower. If there is a silver lining, the lightly traded DWCPF chart isn't as susceptible to chart patterns, but I have to admit that the head and shoulders pattern is a textbook example of that pattern.
ACWX (I-fund) also lost 2% but it is trying to hang onto some support at the orange 100-day average. It's not typical to see a roaring market turn completely bearish without warning, so I will assume the bulls will make another run at this, even if it eventually fails. It may even run up just enough to get everyone back in, then rollover again. Not sure, but this is a little odd and headline driven sell offs tend to bounce back quickly.
BND (bonds / F-fund) sank again and this time it moved down to the bottom of the channel / wedge-like formation, and filled an open gap. Like the I-fund chart above, this has been quite a turnaround. There was no questionable period - just bullish, to bearish for bonds. Let's see if support near 74.50 can hold here.
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 use additional methods and strategies to determine fund positions.
