08/22/25
Stocks were mostly lower on Thursday with the S&P 500 notching its 5th straight losing day - the longest streak since early January. Small caps did catch a modest bid and closed with a slight gain, but overall the large cap indices were heavy. Yields and the dollar were up adding some pressure, and the dollar caused the I-fund to lag the US stock funds.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
Federal reserve Chair Powell is scheduled to speak at the Jackson Hole Economic Symposium today, and judging by this next chart, word may have gotten out about what he'd going to say, or at least what was said by other central bank members yesterday diminished the likelihood of a cut next month.
The "sure thing" interest rate cut at next month's FOMC is now down to 74% on the CMEGroup.com website, and on the Polymarket betting website it was down to 59% last I checked.
The chances are still above 50%, but the stock market is getting concerned. The S&P 500 (C-fund) was down for a 5th straight day on Thursday, which is rare in a bull market, but so far this is still just a "pullback" and it is holding at convenient support - the bottom of that rising channel. A correction (10% or more) would take it below 5900, or the 200-day EMA.
If we are going to get a correction, this would be the season for it to do so. I posted the post Election Year Chart a few days ago and it looked similar. I have no idea if that is going to happen - I doubt it at the moment but I reserve the right to change my mind. We have to get through several weeks before the seasonality chart improves.
Source
The 10-year Treasury Yield remains sticky to the 4.35% area on this chart but the two converging moving averages (50 & 200) have been able to hold it back so far. It is trending lower but it may be trying to price in the decreasing chances of a rate cut in September.
The dollar shot up strongly yesterday. As I mentioned before, I don't know why exactly, and the bond expert on CNBC, Rick Santelli, said he wouldn't want to be investing in the dollar right now, meaning he thinks it is going lower, but to me this chart is starting to look more bullish for the dollar.
It's in an area right now between support and resistance but if this can push above the 200-day average near 27.75, I think we have ourselves a bullish trending dollar. That would change things. This could be the currency market pricing no rate cut next month as well. A rising dollar can put pressure on anything that trades in dollars, which is just about everything we trade and invest in.
With the S&P 500 down for 5 straight days and down to a clear support level, today's action, which will be influenced by Jerome Powell, could set the tone for the next couple of weeks for stocks. Failure to hold this week's lows could create some trouble for next week. But if stocks hold at support and Powell can trigger a rally, the indices could head right back up to test the highs. Big day.
The DWCPF / S-fund had another positive reversal type of day and the support held at the bottom of that red channel, but another test of the 50-day average near 2325 wouldn't be surprising. It may not be rallying lately but it is actually doing a good job on consolidating the gains of the June rally as it trades near the early July levels. The question is whether it is rolling over, or just biding time before the next leg up.
ACWX (I-fund) was down yesterday but it continues to hold above the July peak, but those open gaps below are sure inviting for a pullback. It may all depend on that dollar (UUP) chart above. If the dollar rolls over, this will likely be making new highs again.
BND (bonds / F-fund) was down sharply and continues to hang around that April peak and it is possibly creating a bullish flag. Higher bond prices means lower yields and yields may go down if the Fed holds interest rates steady which would generally mean inflation stays under control, and the economy potentially weakens. It's all a bit confusing. The Fed Funds Rate does not always move with yields, but they do feed off each other.
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 were mostly lower on Thursday with the S&P 500 notching its 5th straight losing day - the longest streak since early January. Small caps did catch a modest bid and closed with a slight gain, but overall the large cap indices were heavy. Yields and the dollar were up adding some pressure, and the dollar caused the I-fund to lag the US stock funds.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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Federal reserve Chair Powell is scheduled to speak at the Jackson Hole Economic Symposium today, and judging by this next chart, word may have gotten out about what he'd going to say, or at least what was said by other central bank members yesterday diminished the likelihood of a cut next month.
The "sure thing" interest rate cut at next month's FOMC is now down to 74% on the CMEGroup.com website, and on the Polymarket betting website it was down to 59% last I checked.
The chances are still above 50%, but the stock market is getting concerned. The S&P 500 (C-fund) was down for a 5th straight day on Thursday, which is rare in a bull market, but so far this is still just a "pullback" and it is holding at convenient support - the bottom of that rising channel. A correction (10% or more) would take it below 5900, or the 200-day EMA.
If we are going to get a correction, this would be the season for it to do so. I posted the post Election Year Chart a few days ago and it looked similar. I have no idea if that is going to happen - I doubt it at the moment but I reserve the right to change my mind. We have to get through several weeks before the seasonality chart improves.
Source
The 10-year Treasury Yield remains sticky to the 4.35% area on this chart but the two converging moving averages (50 & 200) have been able to hold it back so far. It is trending lower but it may be trying to price in the decreasing chances of a rate cut in September.
The dollar shot up strongly yesterday. As I mentioned before, I don't know why exactly, and the bond expert on CNBC, Rick Santelli, said he wouldn't want to be investing in the dollar right now, meaning he thinks it is going lower, but to me this chart is starting to look more bullish for the dollar.
It's in an area right now between support and resistance but if this can push above the 200-day average near 27.75, I think we have ourselves a bullish trending dollar. That would change things. This could be the currency market pricing no rate cut next month as well. A rising dollar can put pressure on anything that trades in dollars, which is just about everything we trade and invest in.
With the S&P 500 down for 5 straight days and down to a clear support level, today's action, which will be influenced by Jerome Powell, could set the tone for the next couple of weeks for stocks. Failure to hold this week's lows could create some trouble for next week. But if stocks hold at support and Powell can trigger a rally, the indices could head right back up to test the highs. Big day.
The DWCPF / S-fund had another positive reversal type of day and the support held at the bottom of that red channel, but another test of the 50-day average near 2325 wouldn't be surprising. It may not be rallying lately but it is actually doing a good job on consolidating the gains of the June rally as it trades near the early July levels. The question is whether it is rolling over, or just biding time before the next leg up.
ACWX (I-fund) was down yesterday but it continues to hold above the July peak, but those open gaps below are sure inviting for a pullback. It may all depend on that dollar (UUP) chart above. If the dollar rolls over, this will likely be making new highs again.
BND (bonds / F-fund) was down sharply and continues to hang around that April peak and it is possibly creating a bullish flag. Higher bond prices means lower yields and yields may go down if the Fed holds interest rates steady which would generally mean inflation stays under control, and the economy potentially weakens. It's all a bit confusing. The Fed Funds Rate does not always move with yields, but they do feed off each other.
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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