02/27/26
Stocks were mixed on Thursday with some good sized losses in the big tech impacting the indices because of the 5.5% loss in Nvidia, and the pain continues to be concentrated in the stocks that have led the rally for the past couple of years. Small caps led as the rotation into the broader indices continues.
Nvidia was one of the more important earnings releases of the quarter, and despite big numbers, it fell sharply yesterday, so big tech still can't get out of its own way. However, the Nasdaq, down 274-points, saw positive internals, as did the NYSE, suggesting the broader market is holding up and the rotation into companies outside of big tech is still doing well.
The S&P 500 (C-fund) saw a sharp morning sell off right after the opening bell, but buyers stepped up quickly and the index traded between the opening high and the morning lows the rest of the day.
The range-bound trade continues and the bulls and the bears both have a good case. I am starting to lean a little more on the bullish side BUT that means there is a pretty good chance that it goes to the downside. That's because the market always seems to be trying to get us to lean on the wrong side at key pivot points. That's not a prediction, but more of my been there, done that experience that what we see is not always what we get.
Eventually the stock market , or S&P 500, is going to break out to either the upside, or the downside, and whichever it is we will probably look back and say, "Of course!" It was trying to tell us that.
On the upside we have strong advance / decline data. We have "dumb money" put / call ratios that typically show up near market bottoms. Earnings have been great and they have been growing while the S&P has moved sideways for months. We have a strong credit market, relatively low interest rates, a loosening Federal Reserve balance sheet, plus support has been repeatedly holding when tested. So, of course a breakout on the upside "was" coming. -- (in hindsight)
But wait! We had six bearish Hindenburg Omen signals in the last month, with a steady dose of new 52-week lows despite the indices near their highs. A bearish Wyckoff Distribution pattern fully formed and near the formation peak. Resistance that refuses to break. Large tech, which leads the market is in a prolonged bearish market - in some sectors. The S&P 500 averages an 18% drawdown during mid-term election years. So, of course a breakdown "was" coming. -- (in hindsight)
Both sound smart. Only one can be right.
The Transportation Index had a day, jumping more than 2% after another successful test of the 20-day moving average.
The Russell 2000 small caps index looks to be forming a beautiful cup, or cup and handle like formation. These tend to break to the upside so as long as that 50-day average is holding, the bulls look to be in charge.
The Financials put together a 3rd good day after selling off all year. We've seen these multi-day rallies before, but the prior twp failed shortly afterward, so where it goes from here will be telling.
The 10-year Treasury Yield fell back down to retest the old gap that was already filled on Monday. Will this hold, or is this on its way to falling below 4% for the first time since November, when this recent stock market rally last bottomed?
The dollar was up slightly as it remains in a short-term ascending trend, but struggles to get above that 50-day moving average.
We will get the PPI wholesale inflation report this morning.
Additional TSP Fund Charts:
DWCPF (S-fund) had a very nice day, and a great day relative to the larger indices. The 2600 area is still tough resistance and it is testing it now. The head and shoulders pattern can hold it here near the overhead resistance, but there are also times where these rally enough to test the middle of the head, which would be near 2625-2630, before they might rollover again. So it has some more work to do.
The ACWX (I fund) pulled back to fill in Wednesday's open gap already, then reversed back up to close near the highs of the day, even though it closed with a modest loss. The bullish trend continues.
BND (bonds / F-fund) made another new high as the 10-year treasury yield continues to flirt with 4%. Stretched, but remaining sturdy.
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 were mixed on Thursday with some good sized losses in the big tech impacting the indices because of the 5.5% loss in Nvidia, and the pain continues to be concentrated in the stocks that have led the rally for the past couple of years. Small caps led as the rotation into the broader indices continues.
| Daily TSP Funds Return More returns |
Nvidia was one of the more important earnings releases of the quarter, and despite big numbers, it fell sharply yesterday, so big tech still can't get out of its own way. However, the Nasdaq, down 274-points, saw positive internals, as did the NYSE, suggesting the broader market is holding up and the rotation into companies outside of big tech is still doing well.
The S&P 500 (C-fund) saw a sharp morning sell off right after the opening bell, but buyers stepped up quickly and the index traded between the opening high and the morning lows the rest of the day.
The range-bound trade continues and the bulls and the bears both have a good case. I am starting to lean a little more on the bullish side BUT that means there is a pretty good chance that it goes to the downside. That's because the market always seems to be trying to get us to lean on the wrong side at key pivot points. That's not a prediction, but more of my been there, done that experience that what we see is not always what we get.
Eventually the stock market , or S&P 500, is going to break out to either the upside, or the downside, and whichever it is we will probably look back and say, "Of course!" It was trying to tell us that.
On the upside we have strong advance / decline data. We have "dumb money" put / call ratios that typically show up near market bottoms. Earnings have been great and they have been growing while the S&P has moved sideways for months. We have a strong credit market, relatively low interest rates, a loosening Federal Reserve balance sheet, plus support has been repeatedly holding when tested. So, of course a breakout on the upside "was" coming. -- (in hindsight)
But wait! We had six bearish Hindenburg Omen signals in the last month, with a steady dose of new 52-week lows despite the indices near their highs. A bearish Wyckoff Distribution pattern fully formed and near the formation peak. Resistance that refuses to break. Large tech, which leads the market is in a prolonged bearish market - in some sectors. The S&P 500 averages an 18% drawdown during mid-term election years. So, of course a breakdown "was" coming. -- (in hindsight)
Both sound smart. Only one can be right.
The Transportation Index had a day, jumping more than 2% after another successful test of the 20-day moving average.
The Russell 2000 small caps index looks to be forming a beautiful cup, or cup and handle like formation. These tend to break to the upside so as long as that 50-day average is holding, the bulls look to be in charge.
The Financials put together a 3rd good day after selling off all year. We've seen these multi-day rallies before, but the prior twp failed shortly afterward, so where it goes from here will be telling.
The 10-year Treasury Yield fell back down to retest the old gap that was already filled on Monday. Will this hold, or is this on its way to falling below 4% for the first time since November, when this recent stock market rally last bottomed?
The dollar was up slightly as it remains in a short-term ascending trend, but struggles to get above that 50-day moving average.
We will get the PPI wholesale inflation report this morning.
Additional TSP Fund Charts:
DWCPF (S-fund) had a very nice day, and a great day relative to the larger indices. The 2600 area is still tough resistance and it is testing it now. The head and shoulders pattern can hold it here near the overhead resistance, but there are also times where these rally enough to test the middle of the head, which would be near 2625-2630, before they might rollover again. So it has some more work to do.
The ACWX (I fund) pulled back to fill in Wednesday's open gap already, then reversed back up to close near the highs of the day, even though it closed with a modest loss. The bullish trend continues.
BND (bonds / F-fund) made another new high as the 10-year treasury yield continues to flirt with 4%. Stretched, but remaining sturdy.
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.
