05/26/26
Stocks were up again on Friday and that helped make it eight straight weeks of gains for the S&P 500. The indices did move lower in the final hours of trading on Friday heading into the long, uncertain weekend, while ceasefire negotiations continued. We saw some pre-holiday reversal as the price of oil and bond yields started moving lower late last week, and against their larger upward trend. There seems to have been modest progress in a deal with Iran, but there is still nothing concrete.
The futures did rally on Sunday evening (yes, they were open on Sunday) despite the confusing war information, and it seem to have held into Monday's futures so the "post-holiday" reversal may not play out as is typical, but nothing has been typical in recent weeks.
On Friday oil was up slightly but it still tested the bottom of the pennant formation and the 50-day EMA. The Sunday night futures suggested this support could be broken on Tuesday as it was trading close to $90 a barrel overnight. The prior two times it fell below the 50-day average, it caught a bid and moved back up. I mentioned a couple of times that these pennant formations often give a fake out break in one direction, then eventually break out in the other direction. So we'll see how it plays out this time with those two tendencies.
The 10-year Treasury Yield also pulled back in the latter half of the week last week heading into the long weekend. Otherwise, this chart unfortunately looks very bullish for yields. The other question may be if the gap needs to get filled before it bounced back up. If the news out of Washington is more dovish on the war-front, perhaps these charts will do the opposite of what is expected from the technical analysts.
The S&P 500 (C-fund) was up on Friday, closing out its 8th straight winning week, but it did close at the lows of the day on Friday. That's not typically bullish news going forward, but the futures may suggest otherwise as this market is still very dependant on oil prices and bond yields.
It's interesting that the current MACD Histogram is at levels we saw during the market correction earlier in the year, while the S&P 500 is flirting with its all time highs.
Here's some interesting stats. The S&P 500 is 10% above its 200-day moving average. It is also 40% above its 200 week MA. According to @CyclesFan on X.com, "In 1987 and 1997 it peaked at 60% above the 200 week MA and in 1998 it reached 65% above the 200 week MA. In 1999 the bubble was concentrated in tech and SPX wasn't extended as it was in 1997/98."
Obviously these stretch marks are the exception and not the rule and 40% is quite extended, and if we look further it gets even more crazy...
The A-I driven Semiconductor Index is 59% above its 200-day average, but 152% above its 200-week moving average.
This is not normal, but who's to say when it ends? The chart still looks good and has been a big cause of the broader market rally, but at some point this is going to have to catch its breadth. I know I have been calling for some kind of a pullback for weeks now, and I've been very wrong.
There was some improvement in the stock market. Rather than any kind of correction or major pullback, the three TSP Stock Fund charts did move sideways at best since for two plus weeks, so maybe that was all the market needed?
Probably not, but the May Seasonality chart basically told us this was possible, but now the chart gets greener for this week.
Source: https://sentimentrader.com/
This A-I driven action is bringing back memories of those dot com days, which all started with the invention of the Netscape browser in 1994. The Dot Com Bubble finally peaked in 2000, so maybe we are in the infancy of this A-I bull market and the outlook is very promising. Still, that doesn't mean stocks will go straight up. That's not the way it works. And look what is going on here...
Additional TSP Fund Charts:
DWCPF (S-fund) has almost recaptured the losses from its recent pullback. It could be looking at new highs, or last week's rally was the pre-holiday reversal, which will reverse back this week. The headlines are calling the shots, which makes things difficult. The charts of oil and Yields suggests things could get worse, but they also had a reversal late last week. Interesting set up for this week.
ACWX (I-fund) rallied as well last week although the index was down modestly on Friday, despite the gain we were given in the I-fund. The F-flag looks OK, but they don't always end well when they do end.
BND (bonds / F-fund) also did the pre-holiday reversal and used it to try to fill in the open gap it created the prior week. It has had a nice bounce but this is still an ugly looking chart unless or until it can get back above about 73.40.
Thanks so much for reading! We'll see you back here tomorrow.
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
Updated monthly:
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
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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.
Stocks were up again on Friday and that helped make it eight straight weeks of gains for the S&P 500. The indices did move lower in the final hours of trading on Friday heading into the long, uncertain weekend, while ceasefire negotiations continued. We saw some pre-holiday reversal as the price of oil and bond yields started moving lower late last week, and against their larger upward trend. There seems to have been modest progress in a deal with Iran, but there is still nothing concrete.
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The futures did rally on Sunday evening (yes, they were open on Sunday) despite the confusing war information, and it seem to have held into Monday's futures so the "post-holiday" reversal may not play out as is typical, but nothing has been typical in recent weeks.
On Friday oil was up slightly but it still tested the bottom of the pennant formation and the 50-day EMA. The Sunday night futures suggested this support could be broken on Tuesday as it was trading close to $90 a barrel overnight. The prior two times it fell below the 50-day average, it caught a bid and moved back up. I mentioned a couple of times that these pennant formations often give a fake out break in one direction, then eventually break out in the other direction. So we'll see how it plays out this time with those two tendencies.
The 10-year Treasury Yield also pulled back in the latter half of the week last week heading into the long weekend. Otherwise, this chart unfortunately looks very bullish for yields. The other question may be if the gap needs to get filled before it bounced back up. If the news out of Washington is more dovish on the war-front, perhaps these charts will do the opposite of what is expected from the technical analysts.
The S&P 500 (C-fund) was up on Friday, closing out its 8th straight winning week, but it did close at the lows of the day on Friday. That's not typically bullish news going forward, but the futures may suggest otherwise as this market is still very dependant on oil prices and bond yields.
It's interesting that the current MACD Histogram is at levels we saw during the market correction earlier in the year, while the S&P 500 is flirting with its all time highs.
Here's some interesting stats. The S&P 500 is 10% above its 200-day moving average. It is also 40% above its 200 week MA. According to @CyclesFan on X.com, "In 1987 and 1997 it peaked at 60% above the 200 week MA and in 1998 it reached 65% above the 200 week MA. In 1999 the bubble was concentrated in tech and SPX wasn't extended as it was in 1997/98."
Obviously these stretch marks are the exception and not the rule and 40% is quite extended, and if we look further it gets even more crazy...
The A-I driven Semiconductor Index is 59% above its 200-day average, but 152% above its 200-week moving average.
This is not normal, but who's to say when it ends? The chart still looks good and has been a big cause of the broader market rally, but at some point this is going to have to catch its breadth. I know I have been calling for some kind of a pullback for weeks now, and I've been very wrong.
There was some improvement in the stock market. Rather than any kind of correction or major pullback, the three TSP Stock Fund charts did move sideways at best since for two plus weeks, so maybe that was all the market needed?
Probably not, but the May Seasonality chart basically told us this was possible, but now the chart gets greener for this week.
Source: https://sentimentrader.com/
This A-I driven action is bringing back memories of those dot com days, which all started with the invention of the Netscape browser in 1994. The Dot Com Bubble finally peaked in 2000, so maybe we are in the infancy of this A-I bull market and the outlook is very promising. Still, that doesn't mean stocks will go straight up. That's not the way it works. And look what is going on here...
Additional TSP Fund Charts:
DWCPF (S-fund) has almost recaptured the losses from its recent pullback. It could be looking at new highs, or last week's rally was the pre-holiday reversal, which will reverse back this week. The headlines are calling the shots, which makes things difficult. The charts of oil and Yields suggests things could get worse, but they also had a reversal late last week. Interesting set up for this week.
ACWX (I-fund) rallied as well last week although the index was down modestly on Friday, despite the gain we were given in the I-fund. The F-flag looks OK, but they don't always end well when they do end.
BND (bonds / F-fund) also did the pre-holiday reversal and used it to try to fill in the open gap it created the prior week. It has had a nice bounce but this is still an ugly looking chart unless or until it can get back above about 73.40.
Thanks so much for reading! We'll see you back here tomorrow.
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
Updated monthly:
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.
