09/02/25
August ended on a sour note on Friday, but it was another positive month for the S&P 500, making it four in a row. The PCE Prices inflation data, and Personal Spending and Income data, all came in mostly inline with expectations so the focus for the Fed will be on this week's jobs report. The on Friday weakness may have been some profit taking in front of the long holiday weekend and another statistically bearish month for stocks.
There was more drama over the weekend regarding Trump's tariffs as reciprocal tariffs are now in limbo waiting. They remain intact for now but this will advance to the Supreme Court. The fact is, the stock market isn't showing much concern over this. Maybe some day, but when the futures opened on Monday night, they were modestly flat despite this development. That could obviously change before the opening bell rings on Tuesday morning.
The bulls were happy that August didn't live up to its bearish reputation, but now they have another historically weak month to deal with as September trading begins today. No matter how you slice it -- last 10 years, last 20, or since 1950, it was the worst performing month of the year on average. It was 10th of 12 during Post Election years, so not much better than last. Can the market overcome another month of headwinds? The September seasonality chart shows the most bearish part of the month has been between the 17th and the 25th of the month.
Source: https://x.com/RyanDetrick/status/1961495356287463555
The S&P 500 / C-fund backed off from Thursday's all time highs. There's a lot of good things going on here, with plenty of support between 6400 and 6300. If we do start seeing closes below 6400 then that will be a change and perhaps then we will see some kind of meaningful pullback, rather than just quick dips as we have been getting. Until then the bulls are in charge, however, as I have been pointing out, we are seeing some negative divergences in some indicators (see the PMO indicator below) that could be sending some warning flags.
Speaking of divergences, the AAII Investor Sentiment data has been trending lower (investors are more bearish) while the S&P 500 has been trending higher. I pointed out other meaningful divergences that led to sharp declines below, although it can takes months of diverging before things change. This current divergence started when the bulls to bears ratio peaked in late June. One thing different about this time is that the peak, was not much of a peak as it only reached about 1.4 rather than going above 2.0 like the others.
The more bearish outlook may actually be helping stocks, but I wanted to point out the divergence.
The August jobs report will come out on Friday, and this may be the focus for the Fed and whether or not they cut interest rates later in the month. The estimates are looking for 63K to 78K jobs being added which, after July's disappointing report, would certainly keep the Fed dovish on rates.
Admin Notes:
* The final August AutoTracker numbers are in. Congratulation to Pickles who had the highest return in the month with a gain of 5.75%. You can find all of the August winners posted here, and the final monthly standings here. The winners have been sent a message via the forum (and that should have sent an email to the address on file in the forum.)
* Also, it's time for the annual NFL Survivor Contest! Please go here for details:
The DWCPF / S-fund also backed off from its 2025 closing high but remains in a bullish position above support. It does have some wiggle room all the way down to the 2350 area if things get dicey, but it would take a move below that to break the positive trend.
This chart is not the ACWX (I-fund), but rather the ratio between the S&P 500 and ACWX going back a couple of years. When this chart is rising, the S&P 500 is outperforming the I-fund. When it is falling the I-fund is outperforming. In August the I-fund took the lead again and this chart is now below several resistance areas, including the 200-day average, so the I-fund may have an advantage going forward.
For that to happen, the dollar may have to fall below that 50-day EMA, but right now it is oscillating between the 50 and 200 day EMAs while looking like it is trying to develop a major bottom. Why that would happen, I don't know. It's just what the chart may be suggesting. If this bottoming action fails, we'll have our answer.
BND (bonds / F-fund) dipped back on Friday after Thursday's breakout above bull flag and the red resistance line. It is sitting on that old resistance as we head into this holiday shortened week.
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.
August ended on a sour note on Friday, but it was another positive month for the S&P 500, making it four in a row. The PCE Prices inflation data, and Personal Spending and Income data, all came in mostly inline with expectations so the focus for the Fed will be on this week's jobs report. The on Friday weakness may have been some profit taking in front of the long holiday weekend and another statistically bearish month for stocks.
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There was more drama over the weekend regarding Trump's tariffs as reciprocal tariffs are now in limbo waiting. They remain intact for now but this will advance to the Supreme Court. The fact is, the stock market isn't showing much concern over this. Maybe some day, but when the futures opened on Monday night, they were modestly flat despite this development. That could obviously change before the opening bell rings on Tuesday morning.
The bulls were happy that August didn't live up to its bearish reputation, but now they have another historically weak month to deal with as September trading begins today. No matter how you slice it -- last 10 years, last 20, or since 1950, it was the worst performing month of the year on average. It was 10th of 12 during Post Election years, so not much better than last. Can the market overcome another month of headwinds? The September seasonality chart shows the most bearish part of the month has been between the 17th and the 25th of the month.
Source: https://x.com/RyanDetrick/status/1961495356287463555
The S&P 500 / C-fund backed off from Thursday's all time highs. There's a lot of good things going on here, with plenty of support between 6400 and 6300. If we do start seeing closes below 6400 then that will be a change and perhaps then we will see some kind of meaningful pullback, rather than just quick dips as we have been getting. Until then the bulls are in charge, however, as I have been pointing out, we are seeing some negative divergences in some indicators (see the PMO indicator below) that could be sending some warning flags.
Speaking of divergences, the AAII Investor Sentiment data has been trending lower (investors are more bearish) while the S&P 500 has been trending higher. I pointed out other meaningful divergences that led to sharp declines below, although it can takes months of diverging before things change. This current divergence started when the bulls to bears ratio peaked in late June. One thing different about this time is that the peak, was not much of a peak as it only reached about 1.4 rather than going above 2.0 like the others.
The more bearish outlook may actually be helping stocks, but I wanted to point out the divergence.
The August jobs report will come out on Friday, and this may be the focus for the Fed and whether or not they cut interest rates later in the month. The estimates are looking for 63K to 78K jobs being added which, after July's disappointing report, would certainly keep the Fed dovish on rates.
Admin Notes:
* The final August AutoTracker numbers are in. Congratulation to Pickles who had the highest return in the month with a gain of 5.75%. You can find all of the August winners posted here, and the final monthly standings here. The winners have been sent a message via the forum (and that should have sent an email to the address on file in the forum.)
* Also, it's time for the annual NFL Survivor Contest! Please go here for details:
The DWCPF / S-fund also backed off from its 2025 closing high but remains in a bullish position above support. It does have some wiggle room all the way down to the 2350 area if things get dicey, but it would take a move below that to break the positive trend.
This chart is not the ACWX (I-fund), but rather the ratio between the S&P 500 and ACWX going back a couple of years. When this chart is rising, the S&P 500 is outperforming the I-fund. When it is falling the I-fund is outperforming. In August the I-fund took the lead again and this chart is now below several resistance areas, including the 200-day average, so the I-fund may have an advantage going forward.
For that to happen, the dollar may have to fall below that 50-day EMA, but right now it is oscillating between the 50 and 200 day EMAs while looking like it is trying to develop a major bottom. Why that would happen, I don't know. It's just what the chart may be suggesting. If this bottoming action fails, we'll have our answer.
BND (bonds / F-fund) dipped back on Friday after Thursday's breakout above bull flag and the red resistance line. It is sitting on that old resistance as we head into this holiday shortened week.
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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