06/27/25
Stocks rallied on Thursday and while the Dow gained 400-points, all eyes are on the S&P 500 which is flirting with the February highs. The Nasdaq is also just a few points away from its all time high made last December. Yields were down again pushing the F-fund higher, and the dollar broke down to new 2025 lows helping the I-fund to a gain about 1%, but it was the small caps that led with a 1.4% return on Thursday.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The first quarter GDP estimate came in lower than estimated at -0.5% on Thursday. Of course we're at the end of the second quarter now so it isn't very meaningful data and the market priced that in months ago so it wasn't much of a factor yesterday.
Market breadth was very bullish, and trading volume was 4 to 1 in flavor of advancing volume over declining on the NYSE, and nearly 3 to on the Nasdaq. Of course new highs outpaced new lows by a wide margin yesterday.
Hitting 6146.52 yesterday, the S&P 500 briefly traded above the February all time closing high of 6144.15, but it didn't quite close above it, nor did get above the February intraday high of 6147.43. That's getting petty because realistically we are at the all time highs and there is potential for some profit taking here for those who are just happy to get their money back from the losses since February. We also have plenty of people and money managers who are underinvested and they may not let the market pull back very deeply, if at all, so there may be a battle going forward.
We talked about these double top possibilities yesterday so let's just see it in pictures. There is probably some kind of pullback coming, but whether it happens above or below the old highs, before or after the holiday, or not at all, is still in question.
Not surprisingly, investor sentiment has gotten more bullish recently, and depending where you look, there are some signs of excessive bullishness - although not everywhere. Our weekly TSP Talk Survey was showing 70% bullish and 18% bearish last I checked, and that is extreme. However, the AAII survey taken a couple of days ago came in with just 35% being bullish, and 40% bearish. Our surveys tend to swing more quickly than the AAII data. We also tend to be more of a smart money reading, compared other surveys (more accurate.)
The more bearish the herd is (the dumb money) the more likely that the market will continue to climb the wall of worry. But that 70% bulls in our survey is a little eye opening. They may be taking into consideration the bullish bias of the upcoming holiday week.
The Nasdaq 100, the top 100 tech stocks on the Nasdaq, made a new high this week - both an intraday and a closing high. Yesterday's highs did hit another resistance line off the previous highs (blue line.) You can see the open gap below 20,600 or so, and that is certainly a possible pullback target. That is unless this index can blast through that overhead resistance for a few days, in which case those old resistance lines may become support.
The 10-year Treasury Yield fell again yesterday making it four closes below that old broke support line. In April it closed 5 days below that support before climbing back above it, and in May it was four closes. Pre-holiday reversals can occur here as well next week.
The dollar did break down and made a new low for the year and UUP is testing levels not seen since last September.
Independence Day is one of the major holidays that could impact the market. This holiday has a very bullish bias over the years - up there with Thanksgiving and Christmas weeks, but there can be a pre-holiday reversals early next week leading up to the weekend, so be on the lookout. The most bullish days historically have been the trading days 1, 2, and 4 days before the holiday, and day 3 after the holiday. That would be next Monday, Wednesday, and Thursday of next week, then Wednesday July 9.
We get key inflation data in the PCE Prices and Personal Income and Spending reports this morning before the opening bell. PCE is the Fed's favorite inflation indicator.
This report could be the trigger that either starts the double top pullback, or perhaps gaps the S&P 500 above the all time highs for a gap and go as we head into the pre-holiday week.
The DWCPF / S-fund showed some life yesterday as it led on the upside making a higher high, but it is still well off the 2025 highs, and the all time high made in 2024. Rising wedges can be bearish, but that fake breakdown on Monday may be telling us this will break to the upside.
The longer term chart shows it breaking above other resistance earlier this week, and the February breakdown candlestick is a possible upside target near 2350 as it retraces those big losses.
The ACWX (I-fund) rallied nicely yesterday and here it is back testing the support line that it fell below last week. Old broken support can act as resistance, but that resistance like is rising so this isn't imminently concerning. The dollar (UUP) breaking down to new lows helps the I-fund but there are now two open gaps above on the UUP chart that could get filled on any relief rally.
BND (bonds / F-fund) was up again and it is now retracing that negative reversal candlestick from April. I would expect a possible pullback at some point down to that red dashed line again. Will it be today's PCE Prices data that does it?
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 rallied on Thursday and while the Dow gained 400-points, all eyes are on the S&P 500 which is flirting with the February highs. The Nasdaq is also just a few points away from its all time high made last December. Yields were down again pushing the F-fund higher, and the dollar broke down to new 2025 lows helping the I-fund to a gain about 1%, but it was the small caps that led with a 1.4% return on Thursday.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The first quarter GDP estimate came in lower than estimated at -0.5% on Thursday. Of course we're at the end of the second quarter now so it isn't very meaningful data and the market priced that in months ago so it wasn't much of a factor yesterday.
Market breadth was very bullish, and trading volume was 4 to 1 in flavor of advancing volume over declining on the NYSE, and nearly 3 to on the Nasdaq. Of course new highs outpaced new lows by a wide margin yesterday.
Hitting 6146.52 yesterday, the S&P 500 briefly traded above the February all time closing high of 6144.15, but it didn't quite close above it, nor did get above the February intraday high of 6147.43. That's getting petty because realistically we are at the all time highs and there is potential for some profit taking here for those who are just happy to get their money back from the losses since February. We also have plenty of people and money managers who are underinvested and they may not let the market pull back very deeply, if at all, so there may be a battle going forward.
We talked about these double top possibilities yesterday so let's just see it in pictures. There is probably some kind of pullback coming, but whether it happens above or below the old highs, before or after the holiday, or not at all, is still in question.
Not surprisingly, investor sentiment has gotten more bullish recently, and depending where you look, there are some signs of excessive bullishness - although not everywhere. Our weekly TSP Talk Survey was showing 70% bullish and 18% bearish last I checked, and that is extreme. However, the AAII survey taken a couple of days ago came in with just 35% being bullish, and 40% bearish. Our surveys tend to swing more quickly than the AAII data. We also tend to be more of a smart money reading, compared other surveys (more accurate.)
The more bearish the herd is (the dumb money) the more likely that the market will continue to climb the wall of worry. But that 70% bulls in our survey is a little eye opening. They may be taking into consideration the bullish bias of the upcoming holiday week.
The Nasdaq 100, the top 100 tech stocks on the Nasdaq, made a new high this week - both an intraday and a closing high. Yesterday's highs did hit another resistance line off the previous highs (blue line.) You can see the open gap below 20,600 or so, and that is certainly a possible pullback target. That is unless this index can blast through that overhead resistance for a few days, in which case those old resistance lines may become support.
The 10-year Treasury Yield fell again yesterday making it four closes below that old broke support line. In April it closed 5 days below that support before climbing back above it, and in May it was four closes. Pre-holiday reversals can occur here as well next week.
The dollar did break down and made a new low for the year and UUP is testing levels not seen since last September.
Independence Day is one of the major holidays that could impact the market. This holiday has a very bullish bias over the years - up there with Thanksgiving and Christmas weeks, but there can be a pre-holiday reversals early next week leading up to the weekend, so be on the lookout. The most bullish days historically have been the trading days 1, 2, and 4 days before the holiday, and day 3 after the holiday. That would be next Monday, Wednesday, and Thursday of next week, then Wednesday July 9.
We get key inflation data in the PCE Prices and Personal Income and Spending reports this morning before the opening bell. PCE is the Fed's favorite inflation indicator.
This report could be the trigger that either starts the double top pullback, or perhaps gaps the S&P 500 above the all time highs for a gap and go as we head into the pre-holiday week.
The DWCPF / S-fund showed some life yesterday as it led on the upside making a higher high, but it is still well off the 2025 highs, and the all time high made in 2024. Rising wedges can be bearish, but that fake breakdown on Monday may be telling us this will break to the upside.
The longer term chart shows it breaking above other resistance earlier this week, and the February breakdown candlestick is a possible upside target near 2350 as it retraces those big losses.
The ACWX (I-fund) rallied nicely yesterday and here it is back testing the support line that it fell below last week. Old broken support can act as resistance, but that resistance like is rising so this isn't imminently concerning. The dollar (UUP) breaking down to new lows helps the I-fund but there are now two open gaps above on the UUP chart that could get filled on any relief rally.
BND (bonds / F-fund) was up again and it is now retracing that negative reversal candlestick from April. I would expect a possible pullback at some point down to that red dashed line again. Will it be today's PCE Prices data that does it?
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.
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