11/06/25
Stocks rebounded on Wednesday with small caps leading the fight, but it was yet another weak close so the "get me in at any cost" type of dip buying is not back yet, and that could mean the bears will take another shot. The bulls can thwart that hypothesis by following through today with another meaningful rally. Better than expected jobs data helped stocks, but it also decreased the chances of another interest rate in December.
Earnings continue to come in better than expected but the market's reaction has been to sell the news. There were several down in after hours last night despite strong numbers. None were major market movers, but the action seems discouraging.
Another concern is the repeated weak closes in the major indices. For the last seven days in a row the S&P 500 fell off its highs into the close, and yesterday was no exception. The late money is considered "smart money" so it does give me some concern. That could all change in a day or two with some strong closes, but for now, that trend is potentially troubling.
ADP jobs data was released yesterday, and with no monthly jobs report from the government on Friday, the market did focus on this data despite that the two reports don't always tell us the same story. The better than expected data data sent yields higher, but the probability of a December interest rate cut declined.
The 10-year Treasury Yield did yesterday what the dollar did last week - breakout above a key moving average. Like the dollar, this is starting to look like a possible inverted head and shoulders pattern, which would mean higher yields down the road. That's not a great formula for growth, but economic growth has been the reason for this recent strength. As always, this current yield is not high, but how fast it rallies could be a concern.
BND (bonds / F-fund) was down sharply with those yields moving higher. That's what happens when the economy expands - yields can move up and bond prices can move down. You can see that it broke down from its channel in recent days, but now it is testing its 50-day average and looking for support.
The S&P 500 (C-fund) had a snap back rally and it would have been a lot more impressive if it had moved above the gap created on Tuesday, and / or if it closed closer to the highs of the day, rather than floundering into the close. It remains in the bullish channel but there are plenty of warning signs, and another move lower today would mean a failed rebound, giving the bears an opportunity to try to take control. More upside today, and the bulls could take charge again.
The PMO indicator crossed back below its moving average so it's time to put up, or shut up. A similar overbought pullback in September had the PMO tag the moving average and start back up.
This is a follow up to Wednesday's commentary regarding Palantir. The stock was hit hard after reporting earnings but I mentioned that the chart still looks like a bullish cup and handle formation. So far that has held. Disclaimer - I do not currently own PLTR. It's just an observation of a chart whose stock price fell sharply, but still looks technically sound.
And here comes that Transportation Index again. It tried to escape its long consolidation, and it did make a two plus month closing high yesterday, but it closed off the highs and didn't quite break out after that better than expected jobs data. It is at resistance and still has something to prove, and a bull market always feels better when the Transports are involved.
The Supreme Court is listening to arguments on the President's tariff policy. How the market reacts will be interesting. Tariffs scared the market to death 6-7 months ago, so if they take them away, will the market rally? As I mentioned yesterday, Trump believes it will hurt the economy if they take them away.
We are supposed to get the October jobs report on Friday, but with the government still shut down, it doesn't look like that will happen.
The DWCPF Index (S-Fund) had a nice rebound, but maybe not good enough to declare victory. The bottom of the trading channel acted as resistance yesterday and today could be a good test. It could fail, of course, but it may just be changing its angle of incline. It did recapture its 50-day average so that was just one close below it, and the bulls can live with that.
ACWX (I-fund) also rebounded and the channel remains intact so the bulls are in charge, even with that dollar creeping up every day recently. Recapturing the 66.50 area would be a bullish indication, and obviously anything below 65 would be a bearish change to the chart.
Thanks so much for reading! We'll see you 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
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 rebounded on Wednesday with small caps leading the fight, but it was yet another weak close so the "get me in at any cost" type of dip buying is not back yet, and that could mean the bears will take another shot. The bulls can thwart that hypothesis by following through today with another meaningful rally. Better than expected jobs data helped stocks, but it also decreased the chances of another interest rate in December.
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Earnings continue to come in better than expected but the market's reaction has been to sell the news. There were several down in after hours last night despite strong numbers. None were major market movers, but the action seems discouraging.
Another concern is the repeated weak closes in the major indices. For the last seven days in a row the S&P 500 fell off its highs into the close, and yesterday was no exception. The late money is considered "smart money" so it does give me some concern. That could all change in a day or two with some strong closes, but for now, that trend is potentially troubling.
ADP jobs data was released yesterday, and with no monthly jobs report from the government on Friday, the market did focus on this data despite that the two reports don't always tell us the same story. The better than expected data data sent yields higher, but the probability of a December interest rate cut declined.
The 10-year Treasury Yield did yesterday what the dollar did last week - breakout above a key moving average. Like the dollar, this is starting to look like a possible inverted head and shoulders pattern, which would mean higher yields down the road. That's not a great formula for growth, but economic growth has been the reason for this recent strength. As always, this current yield is not high, but how fast it rallies could be a concern.
BND (bonds / F-fund) was down sharply with those yields moving higher. That's what happens when the economy expands - yields can move up and bond prices can move down. You can see that it broke down from its channel in recent days, but now it is testing its 50-day average and looking for support.
The S&P 500 (C-fund) had a snap back rally and it would have been a lot more impressive if it had moved above the gap created on Tuesday, and / or if it closed closer to the highs of the day, rather than floundering into the close. It remains in the bullish channel but there are plenty of warning signs, and another move lower today would mean a failed rebound, giving the bears an opportunity to try to take control. More upside today, and the bulls could take charge again.
The PMO indicator crossed back below its moving average so it's time to put up, or shut up. A similar overbought pullback in September had the PMO tag the moving average and start back up.
This is a follow up to Wednesday's commentary regarding Palantir. The stock was hit hard after reporting earnings but I mentioned that the chart still looks like a bullish cup and handle formation. So far that has held. Disclaimer - I do not currently own PLTR. It's just an observation of a chart whose stock price fell sharply, but still looks technically sound.
And here comes that Transportation Index again. It tried to escape its long consolidation, and it did make a two plus month closing high yesterday, but it closed off the highs and didn't quite break out after that better than expected jobs data. It is at resistance and still has something to prove, and a bull market always feels better when the Transports are involved.
The Supreme Court is listening to arguments on the President's tariff policy. How the market reacts will be interesting. Tariffs scared the market to death 6-7 months ago, so if they take them away, will the market rally? As I mentioned yesterday, Trump believes it will hurt the economy if they take them away.
We are supposed to get the October jobs report on Friday, but with the government still shut down, it doesn't look like that will happen.
The DWCPF Index (S-Fund) had a nice rebound, but maybe not good enough to declare victory. The bottom of the trading channel acted as resistance yesterday and today could be a good test. It could fail, of course, but it may just be changing its angle of incline. It did recapture its 50-day average so that was just one close below it, and the bulls can live with that.
ACWX (I-fund) also rebounded and the channel remains intact so the bulls are in charge, even with that dollar creeping up every day recently. Recapturing the 66.50 area would be a bullish indication, and obviously anything below 65 would be a bearish change to the chart.
Thanks so much for reading! We'll see you 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
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.
