06/26/25
Stocks were mixed but mostly negative on Wednesday with a few big tech stocks making new highs that helped lift the Nasdaq and kept the S&P 500 flat, but the broader indices were down, and market breadth was negative. The Dow shed 107-points while the I-fund, and particularly the S-fund lagged with moderate to sharp declines. Bonds and the F-fund were slightly positive.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The set up for stocks is still looking good, but technically the S&P 500 (C-fund) is nearing the all-time highs and we often talk about the tendency to see double top pullbacks. With the recent "V" bottom formation we have to wonder whether it is time to sit back and let a typical double top pullback play out, or just hold on. Well, what happened during prior major "V" bottom double tops?
We don't have to go too far back, in 2020 and 2018-2019 we had similar set ups. The bad news, each did something different.
During the 2020 "V" bottom, the S&P blasted through the prior high and ran another 200-points (or 6%) before a meaningful pullback started.
In 2019 it was the opposite. The S&P 500 poked its head above the old high for a few days but didn't get very far, and from there a serious pullback started and didn't finish until it retested the 200-day average.
So there is some reason to be concerned, and the longer the S&P 500 lingers below the 6147 all time high, the more likely we may get some kind of pullback. As noted in the top chart, I do believe the 2020 chart looks a little more similar to today's chart with that consolidation period in June and July of that year below the prior peak before it made new highs. Once it moved above that orange consolidation block, it rallied about 10% before eventually pulling back.
Yields were on the flat to down side yesterday but as they start to fall below that old support area near 4.3% we could start to see another typical effect...
In 2023 investors could lock in yields above 5% on the 2-Year Notes. Now a 2-Year Note is 3.78%. The lower it goes, the more likely investors will opt for stocks. The higher yields go, the more investors like to get that guaranteed higher rate of return without the risk of the stock market.
Today marks the final day of that awful bearish stretch in June seasonality. Stocks did hold up rather well despite the headwind, and as we get closer July, one of best months of the year, that wind will start to be at the backs of the market.
Source: www.sentimenTrader.com
Today we'll get a GDP estimate, and on Friday key inflation data in the PCE Prices and Personal Income and Spending reports. PCE is the Fed's favorite inflation indicator.
The DWCPF / S-fund looks like it didn't want to go any further without first paying some respect to the gap that was opened on Tuesday.
The ACWX (I-fund) was down moderately yesterday. The dollar (UUP) gapped up yesterday, but closed lower helping the I-fund close off its lows of the day.
There is an open gap between Monday and Tuesday's prices as UUP flirts with a possible breakdown.
BND (bonds / F-fund) was up slightly after a morning pullback that found support at an old resistance line.
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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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.
Stocks were mixed but mostly negative on Wednesday with a few big tech stocks making new highs that helped lift the Nasdaq and kept the S&P 500 flat, but the broader indices were down, and market breadth was negative. The Dow shed 107-points while the I-fund, and particularly the S-fund lagged with moderate to sharp declines. Bonds and the F-fund were slightly positive.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The set up for stocks is still looking good, but technically the S&P 500 (C-fund) is nearing the all-time highs and we often talk about the tendency to see double top pullbacks. With the recent "V" bottom formation we have to wonder whether it is time to sit back and let a typical double top pullback play out, or just hold on. Well, what happened during prior major "V" bottom double tops?
We don't have to go too far back, in 2020 and 2018-2019 we had similar set ups. The bad news, each did something different.
During the 2020 "V" bottom, the S&P blasted through the prior high and ran another 200-points (or 6%) before a meaningful pullback started.
In 2019 it was the opposite. The S&P 500 poked its head above the old high for a few days but didn't get very far, and from there a serious pullback started and didn't finish until it retested the 200-day average.
So there is some reason to be concerned, and the longer the S&P 500 lingers below the 6147 all time high, the more likely we may get some kind of pullback. As noted in the top chart, I do believe the 2020 chart looks a little more similar to today's chart with that consolidation period in June and July of that year below the prior peak before it made new highs. Once it moved above that orange consolidation block, it rallied about 10% before eventually pulling back.
Yields were on the flat to down side yesterday but as they start to fall below that old support area near 4.3% we could start to see another typical effect...
In 2023 investors could lock in yields above 5% on the 2-Year Notes. Now a 2-Year Note is 3.78%. The lower it goes, the more likely investors will opt for stocks. The higher yields go, the more investors like to get that guaranteed higher rate of return without the risk of the stock market.
Today marks the final day of that awful bearish stretch in June seasonality. Stocks did hold up rather well despite the headwind, and as we get closer July, one of best months of the year, that wind will start to be at the backs of the market.
Source: www.sentimenTrader.com
Today we'll get a GDP estimate, and on Friday key inflation data in the PCE Prices and Personal Income and Spending reports. PCE is the Fed's favorite inflation indicator.
The DWCPF / S-fund looks like it didn't want to go any further without first paying some respect to the gap that was opened on Tuesday.
The ACWX (I-fund) was down moderately yesterday. The dollar (UUP) gapped up yesterday, but closed lower helping the I-fund close off its lows of the day.
There is an open gap between Monday and Tuesday's prices as UUP flirts with a possible breakdown.
BND (bonds / F-fund) was up slightly after a morning pullback that found support at an old resistance line.
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.
