08/27/25
Turnaround Tuesday kept its reputation intact yesterday. Monday looked like it was going to be the start of a pre-holiday week reversal, but stocks bounced right back yesterday. On Monday there was a steep sell off going into the close. Yesterday it was a sharp spike higher into the close. The dollar rallied on Monday, and rolled over on Tuesday. The market was not phased yesterday by the firing of Fed governor Lisa Cook, but lawsuits and court decisions could make this more messy for the markets.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
What this means for the rest of the pre-holiday week remains to be seen, but when there is a major 3-day holiday weekend, the markets during the week leading up to the weekend may do some things that goes against the larger trend. That was not the case yesterday but we have three trading days left and some major catalysts on the docket -- Nvidia reports earnings after the closing bell today, and the PCE Prices inflation data will be coming out on Friday.
Market breadth was very healthy yesterday so here we are in the final week of trading in August, and there have been few signs of the bearish seasonality that tends to come this time of year. The S&P 500 is up about 2% for the month so far, and I suppose with those two catalysts coming up, there is still a chance that the month could end negative. The average gain in August since 1950 is -0.01% so basically flat, and only September is worse. By the way, August was up 2.2% last year, but it was down in both 2022 and 2023.
The S&P 500 / C-fund continues to flirt with the all time highs after Monday's double top pullback. There could be more backing and filling to retrace more of Friday's long candlestick, but there are some catalysts that could help take it either way in the short-term. Again, it could have been an excuse for more selling, but the market didn't react negatively to the firing of Fed governor Lisa Cook. At the same time Nvidia could push the major indices either way, and with the Fed's September rate cut in limbo, Friday's inflation data may also tell us which way the market may be heading next.
There's no doubt that the market has been acting well, and when it does so under questionable conditions, that is doubly impressive. I'm surprised to see how well the indices are holding up when I see Microsoft, the 2nd highest market capitalization in the S&P 500, more than 10% off its late July highs. I believe we need to see that 50-day EMA hold, and perhaps Nvidia's earnings tonight will make or break this divergence.
The dollar was down again yesterday after Monday's rally. It is at quite a pivot point where the inverted head and shoulders neckline is supplying some resistance, while the 50-day average and the trend line off the lows holds as support.
Source
The dollar's seasonality gets quite bullish in the coming months, and a stronger dollar can put pressure on the prices of stocks and commodities. Some investments more than others are impacted, but we know the relative strength of the I-fund compared to US stocks, lives and dies by the direction of the dollar. The weakness in the dollar in 2025 is the main reason the I-fund is the leading TSP fund this year.
The DWCPF / S-fund had a nice gain yesterday leading the TSP funds, and it regained most of Monday's losses to close near Friday's 2025 highs. It could be extended, but it could also ride up along the resistance line. Or it could come down to fill in the ascending channel while remaining bullish. Small caps are very interest rate sensitive so Friday's PCE Prices report could be a major catalyst.
ACWX (I-fund) was down slightly despite a decline in the dollar. The dollar weakness may have masked weakness in the international stocks, as this would typically be up on a day the dollar is down and US stocks are up.
BND (bonds / F-fund) was up slightly but it continues to bump its head against overhead resistance.
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
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.
Turnaround Tuesday kept its reputation intact yesterday. Monday looked like it was going to be the start of a pre-holiday week reversal, but stocks bounced right back yesterday. On Monday there was a steep sell off going into the close. Yesterday it was a sharp spike higher into the close. The dollar rallied on Monday, and rolled over on Tuesday. The market was not phased yesterday by the firing of Fed governor Lisa Cook, but lawsuits and court decisions could make this more messy for the markets.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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What this means for the rest of the pre-holiday week remains to be seen, but when there is a major 3-day holiday weekend, the markets during the week leading up to the weekend may do some things that goes against the larger trend. That was not the case yesterday but we have three trading days left and some major catalysts on the docket -- Nvidia reports earnings after the closing bell today, and the PCE Prices inflation data will be coming out on Friday.
Market breadth was very healthy yesterday so here we are in the final week of trading in August, and there have been few signs of the bearish seasonality that tends to come this time of year. The S&P 500 is up about 2% for the month so far, and I suppose with those two catalysts coming up, there is still a chance that the month could end negative. The average gain in August since 1950 is -0.01% so basically flat, and only September is worse. By the way, August was up 2.2% last year, but it was down in both 2022 and 2023.
The S&P 500 / C-fund continues to flirt with the all time highs after Monday's double top pullback. There could be more backing and filling to retrace more of Friday's long candlestick, but there are some catalysts that could help take it either way in the short-term. Again, it could have been an excuse for more selling, but the market didn't react negatively to the firing of Fed governor Lisa Cook. At the same time Nvidia could push the major indices either way, and with the Fed's September rate cut in limbo, Friday's inflation data may also tell us which way the market may be heading next.
There's no doubt that the market has been acting well, and when it does so under questionable conditions, that is doubly impressive. I'm surprised to see how well the indices are holding up when I see Microsoft, the 2nd highest market capitalization in the S&P 500, more than 10% off its late July highs. I believe we need to see that 50-day EMA hold, and perhaps Nvidia's earnings tonight will make or break this divergence.
The dollar was down again yesterday after Monday's rally. It is at quite a pivot point where the inverted head and shoulders neckline is supplying some resistance, while the 50-day average and the trend line off the lows holds as support.
Source
The dollar's seasonality gets quite bullish in the coming months, and a stronger dollar can put pressure on the prices of stocks and commodities. Some investments more than others are impacted, but we know the relative strength of the I-fund compared to US stocks, lives and dies by the direction of the dollar. The weakness in the dollar in 2025 is the main reason the I-fund is the leading TSP fund this year.
The DWCPF / S-fund had a nice gain yesterday leading the TSP funds, and it regained most of Monday's losses to close near Friday's 2025 highs. It could be extended, but it could also ride up along the resistance line. Or it could come down to fill in the ascending channel while remaining bullish. Small caps are very interest rate sensitive so Friday's PCE Prices report could be a major catalyst.
ACWX (I-fund) was down slightly despite a decline in the dollar. The dollar weakness may have masked weakness in the international stocks, as this would typically be up on a day the dollar is down and US stocks are up.
BND (bonds / F-fund) was up slightly but it continues to bump its head against overhead resistance.
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
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.
