08/05/25
Stocks had a huge bounce back day on Monday, and there's no denying it was impressive, but as you'll see in the charts, there's another obstacle. Once the smoke of the two-day drop and pop clear, we'll see which way this market really wants to go. Bonds and the dollar were fairly flat.
Again, sorry for the inconvenience but I got home late last night from the weekend wedding so I will be throwing together a quick report.
The Fed is now very likely to cut interest rates after last Friday's jobs report, and as I mentioned yesterday, the market did have to price that in as it was less certain before that report.
I kept an eye on the action on Monday with some surprise at just how ferocious the rally was after the drubbing the market took on Friday. It certainly is promising that the bulls jumped back so quickly, but other than maybe the I-fund, the other TSP stock fund stocks didn't really have a proper pullback that didn't do very much to help these currently overbought conditions and I would think the indices are still running on fumes and momentum, which are valid reasons for a rally, but still extended.
The S&P 500 (C-fund) retraced almost the entire loss from Friday, but you can see that the gains yesterday have only served to nearly fill in Friday's open gap. That negative outside reversal day on Friday does not usually resolve itself with one down day. Anything is possible but I'm a little skeptical, but trying to keep an open mind.
The DWCPF / S-fund is in the same boat, but on this chart the indices did successfully test its 50-day EMA, which is also near the bottom of that blue trading channel, so there is some legitimacy here. It just has to get past that open gap, which could pose some resistance.
ACWX (I-fund) had been pulling back for days before Friday's sell off, and yesterday it not only recovered Friday's loss, but it nearly got back all of Thursday's loss as well. The 50-day EMA has held up well here with Friday's come back and close above it. This could be a legit low but if the US funds do rollover again, it would be tough for this to bounce right back to the old highs.
BND (bonds / F-fund) was slightly positive as yields slid a bit lower on Monday.
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
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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 had a huge bounce back day on Monday, and there's no denying it was impressive, but as you'll see in the charts, there's another obstacle. Once the smoke of the two-day drop and pop clear, we'll see which way this market really wants to go. Bonds and the dollar were fairly flat.
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Again, sorry for the inconvenience but I got home late last night from the weekend wedding so I will be throwing together a quick report.
The Fed is now very likely to cut interest rates after last Friday's jobs report, and as I mentioned yesterday, the market did have to price that in as it was less certain before that report.
I kept an eye on the action on Monday with some surprise at just how ferocious the rally was after the drubbing the market took on Friday. It certainly is promising that the bulls jumped back so quickly, but other than maybe the I-fund, the other TSP stock fund stocks didn't really have a proper pullback that didn't do very much to help these currently overbought conditions and I would think the indices are still running on fumes and momentum, which are valid reasons for a rally, but still extended.
The S&P 500 (C-fund) retraced almost the entire loss from Friday, but you can see that the gains yesterday have only served to nearly fill in Friday's open gap. That negative outside reversal day on Friday does not usually resolve itself with one down day. Anything is possible but I'm a little skeptical, but trying to keep an open mind.
The DWCPF / S-fund is in the same boat, but on this chart the indices did successfully test its 50-day EMA, which is also near the bottom of that blue trading channel, so there is some legitimacy here. It just has to get past that open gap, which could pose some resistance.
ACWX (I-fund) had been pulling back for days before Friday's sell off, and yesterday it not only recovered Friday's loss, but it nearly got back all of Thursday's loss as well. The 50-day EMA has held up well here with Friday's come back and close above it. This could be a legit low but if the US funds do rollover again, it would be tough for this to bounce right back to the old highs.
BND (bonds / F-fund) was slightly positive as yields slid a bit lower on Monday.
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.
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