Stocks continue to stall near stubborn resistance, which is not what you want to see after V bottom reversal. There is precedence that it could be a temporary pause, but the bulls need to get more serious or the bears will bite back. We still have 8 trading days left, including today, before the April 2nd tariffs kick in and it may be quite a battle. Bonds gave up a big early gain to close just slightly positive, and the I-fund lagged all of the funds.
I suppose it wouldn't be surprising to see a "sell the rumor, buy the news" situation between now and that first week in April, but with the indices remaining oversold and investor sentiment still quite fearful, I don't know how much more pressure the bears can put on. I do keep reminding myself that even though I like the set up going forward, a retest of last week's lows would not be out of the ordinary. Disheartening for the bulls, but not unusual.
With the S&P 500 futures up meaningfully overnight going into Thursday I was hopeful for one of those "gap and go" situations, but the futures went negative before the opening bell and instead we saw a gap down opening. However, as soon as the bell rang the bulls started buying and it looked like we might be seeing a push back above that key technical level of the 200-day EMA, but that failed and now the S&P 500 is still languishing below that resistance giving the bull another day of concern.
It's not a great look, but I went back to 2023, the last time the S&P 500 traded below the 200-day EMA, and I saw some good news and some bad. The bad news was that the early November gap and go did what it is supposed to do, gap up above the resistance of the average instead of stalling like we are seeing now. The good news, there were two other cracks below the average and both of them made their was back above the average eventually without any much further damage being done.
The one in October gave us a relief rally back above the 200-day average, but you can see it failed and led to a lower low, so we could be in for something like that as well. There's many possibilities, but like the one in March of 2023, we are in a better seasonal period than the ones in September / October.
Looking back 20 years, this isn't the worst time of the year to be holding or buying stocks.
The DWCPF (S-fund) failed again at resistance and this could become a problem. With April 2nd looming, the bulls don't seem ready to commit fully.
The ACWX (I-fund) fell sharply with the dollar rallying again, and that put the double top back in play. This index had already consolidated a week or two ago, but it may need a little more time to digest the big gains since mid-January - at least until we evidence that it can hold above that double top.
BND (F-fund) was up big early, then reversed course and ended close to flat, but that was a negative reversal day. However, the chart formation is still fairly bullish as long as 73 holds.
Thanks so much for reading! Have a great weekend!
Tom Crowley
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I suppose it wouldn't be surprising to see a "sell the rumor, buy the news" situation between now and that first week in April, but with the indices remaining oversold and investor sentiment still quite fearful, I don't know how much more pressure the bears can put on. I do keep reminding myself that even though I like the set up going forward, a retest of last week's lows would not be out of the ordinary. Disheartening for the bulls, but not unusual.
With the S&P 500 futures up meaningfully overnight going into Thursday I was hopeful for one of those "gap and go" situations, but the futures went negative before the opening bell and instead we saw a gap down opening. However, as soon as the bell rang the bulls started buying and it looked like we might be seeing a push back above that key technical level of the 200-day EMA, but that failed and now the S&P 500 is still languishing below that resistance giving the bull another day of concern.
It's not a great look, but I went back to 2023, the last time the S&P 500 traded below the 200-day EMA, and I saw some good news and some bad. The bad news was that the early November gap and go did what it is supposed to do, gap up above the resistance of the average instead of stalling like we are seeing now. The good news, there were two other cracks below the average and both of them made their was back above the average eventually without any much further damage being done.
The one in October gave us a relief rally back above the 200-day average, but you can see it failed and led to a lower low, so we could be in for something like that as well. There's many possibilities, but like the one in March of 2023, we are in a better seasonal period than the ones in September / October.
Looking back 20 years, this isn't the worst time of the year to be holding or buying stocks.
The DWCPF (S-fund) failed again at resistance and this could become a problem. With April 2nd looming, the bulls don't seem ready to commit fully.
The ACWX (I-fund) fell sharply with the dollar rallying again, and that put the double top back in play. This index had already consolidated a week or two ago, but it may need a little more time to digest the big gains since mid-January - at least until we evidence that it can hold above that double top.
BND (F-fund) was up big early, then reversed course and ended close to flat, but that was a negative reversal day. However, the chart formation is still fairly bullish as long as 73 holds.
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.
