07/08/25
With the spending bill behind us, stocks suffered a post holiday hangover, and with all eyes back on the uncertainty and ever changing tariff situation, there were some profit taking yesterday. However, seasonality is still on the bulls' side for at least a few more days, and I expect the dip buyers to show up at some point this week. There was a rally in the last hour of trading pushing the indices off there lows.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The internals were quite weak yesterday with decliners outpacing advancers by about 3 to 1. This was looking much worse about 90 minutes before the close, but we did get that late rally. As we talked about yesterday, we were due for something like this - a cleansing or shake out of the weaker holding bulls.
This old seasonality chart surrounding the 4th of July has been fairly accurate so far this year. The best days last week were Wednesday and Thursday (days -2 and -1 on the charts) and then day +1, which would have been yesterday, was less bullish. Day +2 gets a little better but this year it happens to be a Tuesday, so might we get a Turnaround Tuesday already, or will Wednesday's +3 record be the day - assuming the bulls can bounce back?
Seasonality aside, the S&P 500 (C-fund) chart still looks fine and as you will see in a few charts in this commentary, the pullback is pushing the indices down toward their recent breakout areas, which is normal and healthy, as long as they don't break that old resistance too severely. 6147 (6140 - 6150) is where we see several support areas coming together.
The IWM (Russell 2000 small caps ETF) broke out above its resistance line near 218, and the 200-day average is near 215, so a pullback to those areas is nothing too concerning, but obviously a sub-209 reading would be alarming.
The market leading Dow Transportation Index is off its recent highs and it may be looking to test that 200 day average near 15,624, and the old resistance line closer to about 15,265, before resuming higher.
Yields and the dollar were up sharply again, adding to the pressure on stocks and bonds. Both moved above resistance that could prove to be turning points if it holds for another couple of days.
Trading volume was light yesterday as people drag themselves back from their long weekend, and we could get more of an idea as the week goes on, how serious any pullback may want to get.
DWCPF / S-fund broke out late last week, and yesterday it was back testing that old resistance. Typical action so far, and the bulls may either use that top resistance line as a place to buy, otherwise the bears may take it back to the bottom of the wedge.
The ACWX (I-fund) slipped below the support of its channel again, but managed to close above it after the late rally yesterday. The dollar's rally put a lot of pressure on the I-fund, and the next move here may depend on how serious the recent strength in the dollar is going to be.
BND (bonds / F-fund) fell below a couple of key levels of support yesterday, and it may have its eyes on that open gap from mid-June.
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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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.
With the spending bill behind us, stocks suffered a post holiday hangover, and with all eyes back on the uncertainty and ever changing tariff situation, there were some profit taking yesterday. However, seasonality is still on the bulls' side for at least a few more days, and I expect the dip buyers to show up at some point this week. There was a rally in the last hour of trading pushing the indices off there lows.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The internals were quite weak yesterday with decliners outpacing advancers by about 3 to 1. This was looking much worse about 90 minutes before the close, but we did get that late rally. As we talked about yesterday, we were due for something like this - a cleansing or shake out of the weaker holding bulls.
This old seasonality chart surrounding the 4th of July has been fairly accurate so far this year. The best days last week were Wednesday and Thursday (days -2 and -1 on the charts) and then day +1, which would have been yesterday, was less bullish. Day +2 gets a little better but this year it happens to be a Tuesday, so might we get a Turnaround Tuesday already, or will Wednesday's +3 record be the day - assuming the bulls can bounce back?
Seasonality aside, the S&P 500 (C-fund) chart still looks fine and as you will see in a few charts in this commentary, the pullback is pushing the indices down toward their recent breakout areas, which is normal and healthy, as long as they don't break that old resistance too severely. 6147 (6140 - 6150) is where we see several support areas coming together.
The IWM (Russell 2000 small caps ETF) broke out above its resistance line near 218, and the 200-day average is near 215, so a pullback to those areas is nothing too concerning, but obviously a sub-209 reading would be alarming.
The market leading Dow Transportation Index is off its recent highs and it may be looking to test that 200 day average near 15,624, and the old resistance line closer to about 15,265, before resuming higher.
Yields and the dollar were up sharply again, adding to the pressure on stocks and bonds. Both moved above resistance that could prove to be turning points if it holds for another couple of days.
Trading volume was light yesterday as people drag themselves back from their long weekend, and we could get more of an idea as the week goes on, how serious any pullback may want to get.
DWCPF / S-fund broke out late last week, and yesterday it was back testing that old resistance. Typical action so far, and the bulls may either use that top resistance line as a place to buy, otherwise the bears may take it back to the bottom of the wedge.
The ACWX (I-fund) slipped below the support of its channel again, but managed to close above it after the late rally yesterday. The dollar's rally put a lot of pressure on the I-fund, and the next move here may depend on how serious the recent strength in the dollar is going to be.
BND (bonds / F-fund) fell below a couple of key levels of support yesterday, and it may have its eyes on that open gap from mid-June.
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.
Like what you're seeing on TSP Talk? Why not Tell a Friend about us? We'd really appreciate it, and they may too.
Thanks!
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.
