10/09/25
The Dow was flat yesterday, but most of the major indices easily reversed Tuesday's losses - and then some. It only took a day for dip buyers to show up, which continues to frustrate the bears, and the bulls trying to put more money to work at pullback prices. Bonds were flat but the dollar rallied again.
The S&P 500 (C-fund) and the Nasdaq made new all time highs again, erasing Tuesday's losses. The small caps of the Russell 2000 and DWCPF (S-fund) came up just short of new highs.
So it's back to the top of the rising channel for the S&P 500 and it feels like if you blink, you'll miss the dips. Was Tuesday's decline a trap to push more weaker bulls out, or was Wednesday's rally a trap to suck in more of the underinvested?
Well known money manager Paul Tudor Jones recently compared the current market to 1999 - more specifically October of 1999. We all know that the dot com bubble started to burst in 2000, but he was actually suggesting we still have the late 1999 market blow off top to go through.
That may end up being the case but there is a big difference to me, however. Stocks have been going up since early April this year, and in 1999 there was a sharp pullback from July into October, preceding that 4th quarter rally.
Yields continue to trend lower but yesterday the 10-year Treasury Yield reversed an early loss and closed positive. It remains below key resistance, although there is now support coming off the September lows. Something will have to give this week.
The dollar - yes the dollar again, rallied yesterday elevating it higher above the 200-day average that had been holding as resistance for months.
This 7-month chart shows that average getting tested and repeatedly swatting it back down. But not this week so far, and it also closed above a descending resistance line. It did close off its highs yesterday, potentially creating a negative reversal day, but with the 0.22% gain, that's debatable.
Let's go back a long way to 2011. Check out the long term support line connecting the lows. Is the decline in the dollar over, or will it break down and make all of the dollar bears correct?
The Dow Transportation Index also recapture a large portion of its losses from Tuesday. I won't post the chart because it has been trading in such a tight range for more than a month.
No jobless claims numbers today because of the shutdown. The market seems fine with all of it.
The DWCPF (S-fund) regained most of Tuesday's losses so the dip buyers were not being patient. It's trending higher but perhaps volatility is starting to pick up as Tuesday's loss was one of the few 1% losses we've seen in a while. However, the trend is up and betting against the bulls has been hazardous investors' health in recent month.
ACWX (I-fund) managed a decent gain despite that dollar starting to bounce. I hate to continuously repeat myself, but it bears repeating that the I-fund doesn't necessarily move counter to the dollar, rather its relative strength versus US stocks is stronger when the dollar is falling, and weaker when the dollar is rising. Yesterday was a modest exception as the S&P and ACWX were about approximately the same percentage.
BND (bonds / F-fund) was flat as it gets sandwiched between rising support (red line) and resistance (blue dashed 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
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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 may use additional methods and strategies to determine fund positions.
The Dow was flat yesterday, but most of the major indices easily reversed Tuesday's losses - and then some. It only took a day for dip buyers to show up, which continues to frustrate the bears, and the bulls trying to put more money to work at pullback prices. Bonds were flat but the dollar rallied again.
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The S&P 500 (C-fund) and the Nasdaq made new all time highs again, erasing Tuesday's losses. The small caps of the Russell 2000 and DWCPF (S-fund) came up just short of new highs.
So it's back to the top of the rising channel for the S&P 500 and it feels like if you blink, you'll miss the dips. Was Tuesday's decline a trap to push more weaker bulls out, or was Wednesday's rally a trap to suck in more of the underinvested?
Well known money manager Paul Tudor Jones recently compared the current market to 1999 - more specifically October of 1999. We all know that the dot com bubble started to burst in 2000, but he was actually suggesting we still have the late 1999 market blow off top to go through.
That may end up being the case but there is a big difference to me, however. Stocks have been going up since early April this year, and in 1999 there was a sharp pullback from July into October, preceding that 4th quarter rally.
Yields continue to trend lower but yesterday the 10-year Treasury Yield reversed an early loss and closed positive. It remains below key resistance, although there is now support coming off the September lows. Something will have to give this week.
The dollar - yes the dollar again, rallied yesterday elevating it higher above the 200-day average that had been holding as resistance for months.
This 7-month chart shows that average getting tested and repeatedly swatting it back down. But not this week so far, and it also closed above a descending resistance line. It did close off its highs yesterday, potentially creating a negative reversal day, but with the 0.22% gain, that's debatable.
Let's go back a long way to 2011. Check out the long term support line connecting the lows. Is the decline in the dollar over, or will it break down and make all of the dollar bears correct?
The Dow Transportation Index also recapture a large portion of its losses from Tuesday. I won't post the chart because it has been trading in such a tight range for more than a month.
No jobless claims numbers today because of the shutdown. The market seems fine with all of it.
The DWCPF (S-fund) regained most of Tuesday's losses so the dip buyers were not being patient. It's trending higher but perhaps volatility is starting to pick up as Tuesday's loss was one of the few 1% losses we've seen in a while. However, the trend is up and betting against the bulls has been hazardous investors' health in recent month.
ACWX (I-fund) managed a decent gain despite that dollar starting to bounce. I hate to continuously repeat myself, but it bears repeating that the I-fund doesn't necessarily move counter to the dollar, rather its relative strength versus US stocks is stronger when the dollar is falling, and weaker when the dollar is rising. Yesterday was a modest exception as the S&P and ACWX were about approximately the same percentage.
BND (bonds / F-fund) was flat as it gets sandwiched between rising support (red line) and resistance (blue dashed 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.
