01/12/26
Stocks rallied after a jobs report that was just short of estimates, but the unemployment rate ticked lower. It was not a threat to the economy nor inflation so it created a Goldilocks reaction and we saw new highs on several indices. Also, the Supreme Court did not rule on the legality of tariffs so that can has been kicked down the road and will have to be death with later. Bonds rallied as yields slipped on the weaker than expected data.
The S&P 500 (C-fund) rallied again and that made another new all-time high. This looks bullish but the blue rising wedge could be resistance and may be a catalyst for some volatility. The one thing that could keep the indices grinding higher is that investors are still not showing much confidence, and markets love to climb a wall of worry.
The 10-year Treasury Yield whipped around a bit after the jobs report, but was nearly flat by the close, so the bull flag consolidation continued. This looks bearish for bonds and the F-fund since they move counter to yields, but the flag is now about a month long and that 200-day average has been formidable resistance. Maybe it is too strong?
The dollar has gotten surprisingly bullish and all of a sudden the I-find is starting to lag, and the small caps are trying to take the role as the leader in the early stages of the new year.
The Transportation Index continues to perform well and the ascending trading channel looks extremely bullish for this market leader.
The small caps of the Russell 2000 had a text book breakout from its bull flag to start the year, but in the short-term there is room for some backing and filling as it test the upper resistance line.
We'll get CPI inflation (Consumer prices) data on Tuesday, followed by the PPI (Wholesale prices) report on Wednesday.
Reminder: I have some personal plans this week and the commentaries may be a little brief, and I may not respond to emails as quickly as I'd normally like to. I apologize for any inconvenience this may cause.
DWCPF (S-fund) broke above the neckline of the bullish inverted head and shoulders pattern. This couldn't look any better, but we know that the S-fund can bring a lot of volatility, even when it is doing well.
The ACWX (I-fund index) was up on Friday and the gain was quite impressive given the size of the rally in the dollar on Friday. It's in a very bullish looking trading channel, but there is a lot of room down to the bottom of that channel with open gaps all along the way, so it could be vulnerable to some kind of drawdown.
BND (bonds / F-fund) continues to grind higher but this is starting to look bearish for bonds with that overhead resistance, and that head and shoulders pattern testing the head. Head and shoulders patterns are not always bearish as they are considered continuation patterns, and when they form in an uptrend, they could break to the upside, but the default is to expect a bearish outcome.
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
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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 rallied after a jobs report that was just short of estimates, but the unemployment rate ticked lower. It was not a threat to the economy nor inflation so it created a Goldilocks reaction and we saw new highs on several indices. Also, the Supreme Court did not rule on the legality of tariffs so that can has been kicked down the road and will have to be death with later. Bonds rallied as yields slipped on the weaker than expected data.
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The S&P 500 (C-fund) rallied again and that made another new all-time high. This looks bullish but the blue rising wedge could be resistance and may be a catalyst for some volatility. The one thing that could keep the indices grinding higher is that investors are still not showing much confidence, and markets love to climb a wall of worry.
The 10-year Treasury Yield whipped around a bit after the jobs report, but was nearly flat by the close, so the bull flag consolidation continued. This looks bearish for bonds and the F-fund since they move counter to yields, but the flag is now about a month long and that 200-day average has been formidable resistance. Maybe it is too strong?
The dollar has gotten surprisingly bullish and all of a sudden the I-find is starting to lag, and the small caps are trying to take the role as the leader in the early stages of the new year.
The Transportation Index continues to perform well and the ascending trading channel looks extremely bullish for this market leader.
The small caps of the Russell 2000 had a text book breakout from its bull flag to start the year, but in the short-term there is room for some backing and filling as it test the upper resistance line.
We'll get CPI inflation (Consumer prices) data on Tuesday, followed by the PPI (Wholesale prices) report on Wednesday.
Reminder: I have some personal plans this week and the commentaries may be a little brief, and I may not respond to emails as quickly as I'd normally like to. I apologize for any inconvenience this may cause.
DWCPF (S-fund) broke above the neckline of the bullish inverted head and shoulders pattern. This couldn't look any better, but we know that the S-fund can bring a lot of volatility, even when it is doing well.
The ACWX (I-fund index) was up on Friday and the gain was quite impressive given the size of the rally in the dollar on Friday. It's in a very bullish looking trading channel, but there is a lot of room down to the bottom of that channel with open gaps all along the way, so it could be vulnerable to some kind of drawdown.
BND (bonds / F-fund) continues to grind higher but this is starting to look bearish for bonds with that overhead resistance, and that head and shoulders pattern testing the head. Head and shoulders patterns are not always bearish as they are considered continuation patterns, and when they form in an uptrend, they could break to the upside, but the default is to expect a bearish outcome.
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.
