10/28/25
Stocks rallied on Monday with large cap tech leading the way ahead of this week's most important week for earnings as five of the Magnificent 7 stocks will be reporting. There was a lot of green across the board, but small caps and the I-fund lagged the larger cap indices. Yields were flat and the dollar was down a bit.
Stocks got off to a good start this week, which is going to be a huge week for data and headlines. Five of the Magnificent 7 companies are reporting earnings this week - three tomorrow; Microsoft, Meta, Alphabet, and Apple and Amazon on Thursday. Nvidia doesn't report until mid-November but tomorrow Jensen Huang, the CEO, will give a keynote address at the Nvidia GTC event.
Also on Wednesday the Federal Reserve will be giving us their decision on interest rates and the updated monetary policy statement.
We'll get the key inflation PCE Prices data data on Friday, and if that's not enough, President Trump will be meeting with China's President Xi on Friday as well. If you recall, that 3% pullback that we got on October 10 was triggered by tariff issues with China, so this could have the ability to make or break the current rally.
The S&P 500 (C-fund) ramped up for a third straight day and is sitting at the all time highs after a second gap was opened yesterday. It is already reaching toward the top of its trading channel after successfully testing and holding at the bottom earlier this month. It looks stretched here for the short-term but the seasonality calendar is just getting warmed up.
That PMO crossover above its average is generally a bullish sign but it does have a tendency to trigger a short-term overbought pause or pullback, but that didn't happen in September - the previous bullish crossover. Also note that this indicator is still trending lower, but this negative divergence has been a false flag for months. Would it be complacency to ignore this normally bearish indication?
The 10-year Treasury Yield was flat yesterday closing at 4.0% (3.997%) but it was up as high as 4.03% before pulling back in the afternoon. I don't think anyone would mind if this just hung around the 4% area for a while.
The dollar (UUP) was down and something is going to have to give as it continues to hold below that red 200-day moving average, but here comes the bottom of a short-term trading channel trying to act as support.
And here's that dreaded market leader again! I say that tongue in cheek since the Dow Transportation Index has been anything but a leader in recent months. But it is trying to make a higher low after holding at the 200-day average, and closing back above the 50-day average yesterday.
For what it's worth, today (October 28th), is the best performing day on average for the S&P 500. That is likely due to some snap back rallies in late October over the years, after a few October crashes.
And if we want to look out further, the past 21 times the Fed cut interest rates with the S&P 500 within 2% of an all-time high, stocks were higher 3 and 6 months later 74% of the time, and a year later it was up all 21 times. - Thanks to @RyanDetrick on X for that data!
The DWCPF Index (S-Fund) closed at a new high yesterday, but for the second day in a row it closed near the lows of the day. Sometimes small caps have a lagging effect as money managers jump into large caps first when stocks breakout, but a strong bull market should have small caps leading the way, especially when interest rates are coming down.
ACWX (I-fund) also lagged the S&P 500 but it outpaced the small caps, and perhaps the decline in the dollar helped. But no matter how you slice it, this chart remains strong.
BND (bonds / F-fund) was up as yields fell late in the day helping push bond prices higher, and the recent sideways consolidation is boding well for another possible push higher. It will have to deal with some resistance, but those resistance lines are moving up each day.
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 use additional methods and strategies to determine fund positions.
Stocks rallied on Monday with large cap tech leading the way ahead of this week's most important week for earnings as five of the Magnificent 7 stocks will be reporting. There was a lot of green across the board, but small caps and the I-fund lagged the larger cap indices. Yields were flat and the dollar was down a bit.
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Stocks got off to a good start this week, which is going to be a huge week for data and headlines. Five of the Magnificent 7 companies are reporting earnings this week - three tomorrow; Microsoft, Meta, Alphabet, and Apple and Amazon on Thursday. Nvidia doesn't report until mid-November but tomorrow Jensen Huang, the CEO, will give a keynote address at the Nvidia GTC event.
Also on Wednesday the Federal Reserve will be giving us their decision on interest rates and the updated monetary policy statement.
We'll get the key inflation PCE Prices data data on Friday, and if that's not enough, President Trump will be meeting with China's President Xi on Friday as well. If you recall, that 3% pullback that we got on October 10 was triggered by tariff issues with China, so this could have the ability to make or break the current rally.
The S&P 500 (C-fund) ramped up for a third straight day and is sitting at the all time highs after a second gap was opened yesterday. It is already reaching toward the top of its trading channel after successfully testing and holding at the bottom earlier this month. It looks stretched here for the short-term but the seasonality calendar is just getting warmed up.
That PMO crossover above its average is generally a bullish sign but it does have a tendency to trigger a short-term overbought pause or pullback, but that didn't happen in September - the previous bullish crossover. Also note that this indicator is still trending lower, but this negative divergence has been a false flag for months. Would it be complacency to ignore this normally bearish indication?
The 10-year Treasury Yield was flat yesterday closing at 4.0% (3.997%) but it was up as high as 4.03% before pulling back in the afternoon. I don't think anyone would mind if this just hung around the 4% area for a while.
The dollar (UUP) was down and something is going to have to give as it continues to hold below that red 200-day moving average, but here comes the bottom of a short-term trading channel trying to act as support.
And here's that dreaded market leader again! I say that tongue in cheek since the Dow Transportation Index has been anything but a leader in recent months. But it is trying to make a higher low after holding at the 200-day average, and closing back above the 50-day average yesterday.
For what it's worth, today (October 28th), is the best performing day on average for the S&P 500. That is likely due to some snap back rallies in late October over the years, after a few October crashes.
And if we want to look out further, the past 21 times the Fed cut interest rates with the S&P 500 within 2% of an all-time high, stocks were higher 3 and 6 months later 74% of the time, and a year later it was up all 21 times. - Thanks to @RyanDetrick on X for that data!
The DWCPF Index (S-Fund) closed at a new high yesterday, but for the second day in a row it closed near the lows of the day. Sometimes small caps have a lagging effect as money managers jump into large caps first when stocks breakout, but a strong bull market should have small caps leading the way, especially when interest rates are coming down.
ACWX (I-fund) also lagged the S&P 500 but it outpaced the small caps, and perhaps the decline in the dollar helped. But no matter how you slice it, this chart remains strong.
BND (bonds / F-fund) was up as yields fell late in the day helping push bond prices higher, and the recent sideways consolidation is boding well for another possible push higher. It will have to deal with some resistance, but those resistance lines are moving up each day.
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 use additional methods and strategies to determine fund positions.
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