04/09/26
Stocks gapped up on the news of a ceasefire, a ceasefire that drew a lot of skepticism, but that didn't stop the indices from rallying big. The Dow had its largest one day gain in almost a year, and we actually saw new highs in a few sectors yesterday. The indices did not close at their highs, so not everyone is embracing the rally.
There were a lot of, "yeah buts" after yesterday's rally because of issues with Iran, Israel, and Lebanon. If the rally failed on that, there would be a case but, even though the highs of the day were made early, the gains held up for the most part so the market was looking for some kind of an excuse to rally, or at least get past the spiking price of oil.
However, there is now a giant open gap below on the charts that will either get filled quickly, or we'll have to look over our shoulder for the next several weeks knowing it is there for the bears to target.
The S&P 500 (C-fund) gapped open above the 50-day EMA. It is not shown, but it actually gapped up above both the 200 and 50-day simple moving averages, and that had only happened four other times since 1950. The market didn't do well over the next 3-months in those other instances, but 4 times in over 75 years is not a great sample size and probably noise, but the prospects of a gap fill make it a possibility that we could pullback.
More recently - according to Carl Quintanilla on CNBC - "Since 2003, SPY has opened above both its 50 and 200 DMA while closing below both the day prior just three other times .. “.. Those three periods saw immediate declines of -13%, -16%, and -13% over the next few weeks.”
If we just look at the 200-day average, the last two times that SPY gapped up above its 200 day moving average it led to multi month rallies, without the gap closing. And when a rebound retraces this much of a correction, the chances are high that the lows are in.
So, it is a bullish move, but history suggests there could be some risk with this development.
The weekly chart of the S&P 500 shows some lines in the sand that will need to get crossed next if the rally is going to continue. The 20-week moving average has been a good source of support and resistance over the years. After a week and half rally, the weekly chart is already testing it. 6800 or so, is the line.
Going back a couple of years shows the effectiveness of this moving average. The last time it went from below to back above the average, it gapped above it. For that to repeat it would have to gap up next Monday morning when the next weekly candlestick is created.
We actually got new highs in the Semiconductor index, the High Yield Corporate Bond Funds (credit market), and the Dow Transportation Index yesterday.
The Transportation Index did not hold the breakout, and closed well off the highs, so that's a little concerning for the short-term.
The price of oil fell sharply, but it is still not cheap at $96. It also found some support near the 50-day EMA so the next couple of days will need to confirm this sell off by avoiding any rebounds back above the ascending support line.
The 10-year Treasury Yield fell along with the price of oil as inflation concerns eased. This chart is also facing support at the 50-day average, which would need to break for yields to continue lower.
The probability of a Fed interest rate cut in 2026 came down on this move lower in oil, hence easing inflation.
We will get the February PCE Prices data today, and the March CPI data on Friday. That March data will be hot because of the price of oil so it will depend on where it falls inline with consensus estimates which are between +0.06% and +0.07%, and some estimates are as high as 1.0% for the month. The February CPI was +0.03%.
There is a good chance that some or all of the gap opened yesterday will try to get filled, but with so many folks on the sidelines heading into yesterday (because fear was so high) the market may not make it easy on them to get in cheaper, so this will be an interesting battle. Of course the headlines could dictate that action in the short-term.
Admin Note: From tsp.gov: "Scheduled System Maintenance: Due to scheduled system maintenance, My Account will be unavailable Saturday, April 11, from 6:00 a.m. to 8:00 p.m. eastern time. Thank you for your patience while we work to improve your TSP experience."
Additional TSP Fund Charts:
DWCPF (S-fund) gapped up with the rest of the market and not only did it gap up above the 50-day average like the S&P 500, but it also jumped above the neckline of the head and shoulders pattern (blue), and the descending resistance line (red.) The bottoming action was good, but we always have to consider the open gap, especially in the short-term. The old resistance line might act as support and try to keep this from filling that gap.
ACWX (I-fund) had a huge day with oil and the dollar falling sharply. We don't get many 4% days in any fund. There are several large gaps on this chart - two above and now another big one below. So it's the same story as the other indices - good action but we'll be looking over our shoulders.
BND (bonds / F-fund) moved higher yesterday as yields sank, but the yields came off their lows and bonds came off their highs after a false breakout above the wedge formation. Here too there is a gap that may need to get filled before advancing.
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.
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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 gapped up on the news of a ceasefire, a ceasefire that drew a lot of skepticism, but that didn't stop the indices from rallying big. The Dow had its largest one day gain in almost a year, and we actually saw new highs in a few sectors yesterday. The indices did not close at their highs, so not everyone is embracing the rally.
| Daily TSP Funds Return More returns |
There were a lot of, "yeah buts" after yesterday's rally because of issues with Iran, Israel, and Lebanon. If the rally failed on that, there would be a case but, even though the highs of the day were made early, the gains held up for the most part so the market was looking for some kind of an excuse to rally, or at least get past the spiking price of oil.
However, there is now a giant open gap below on the charts that will either get filled quickly, or we'll have to look over our shoulder for the next several weeks knowing it is there for the bears to target.
The S&P 500 (C-fund) gapped open above the 50-day EMA. It is not shown, but it actually gapped up above both the 200 and 50-day simple moving averages, and that had only happened four other times since 1950. The market didn't do well over the next 3-months in those other instances, but 4 times in over 75 years is not a great sample size and probably noise, but the prospects of a gap fill make it a possibility that we could pullback.
More recently - according to Carl Quintanilla on CNBC - "Since 2003, SPY has opened above both its 50 and 200 DMA while closing below both the day prior just three other times .. “.. Those three periods saw immediate declines of -13%, -16%, and -13% over the next few weeks.”
If we just look at the 200-day average, the last two times that SPY gapped up above its 200 day moving average it led to multi month rallies, without the gap closing. And when a rebound retraces this much of a correction, the chances are high that the lows are in.
So, it is a bullish move, but history suggests there could be some risk with this development.
The weekly chart of the S&P 500 shows some lines in the sand that will need to get crossed next if the rally is going to continue. The 20-week moving average has been a good source of support and resistance over the years. After a week and half rally, the weekly chart is already testing it. 6800 or so, is the line.
Going back a couple of years shows the effectiveness of this moving average. The last time it went from below to back above the average, it gapped above it. For that to repeat it would have to gap up next Monday morning when the next weekly candlestick is created.
We actually got new highs in the Semiconductor index, the High Yield Corporate Bond Funds (credit market), and the Dow Transportation Index yesterday.
The Transportation Index did not hold the breakout, and closed well off the highs, so that's a little concerning for the short-term.
The price of oil fell sharply, but it is still not cheap at $96. It also found some support near the 50-day EMA so the next couple of days will need to confirm this sell off by avoiding any rebounds back above the ascending support line.
The 10-year Treasury Yield fell along with the price of oil as inflation concerns eased. This chart is also facing support at the 50-day average, which would need to break for yields to continue lower.
The probability of a Fed interest rate cut in 2026 came down on this move lower in oil, hence easing inflation.
We will get the February PCE Prices data today, and the March CPI data on Friday. That March data will be hot because of the price of oil so it will depend on where it falls inline with consensus estimates which are between +0.06% and +0.07%, and some estimates are as high as 1.0% for the month. The February CPI was +0.03%.
There is a good chance that some or all of the gap opened yesterday will try to get filled, but with so many folks on the sidelines heading into yesterday (because fear was so high) the market may not make it easy on them to get in cheaper, so this will be an interesting battle. Of course the headlines could dictate that action in the short-term.
Admin Note: From tsp.gov: "Scheduled System Maintenance: Due to scheduled system maintenance, My Account will be unavailable Saturday, April 11, from 6:00 a.m. to 8:00 p.m. eastern time. Thank you for your patience while we work to improve your TSP experience."
Additional TSP Fund Charts:
DWCPF (S-fund) gapped up with the rest of the market and not only did it gap up above the 50-day average like the S&P 500, but it also jumped above the neckline of the head and shoulders pattern (blue), and the descending resistance line (red.) The bottoming action was good, but we always have to consider the open gap, especially in the short-term. The old resistance line might act as support and try to keep this from filling that gap.
ACWX (I-fund) had a huge day with oil and the dollar falling sharply. We don't get many 4% days in any fund. There are several large gaps on this chart - two above and now another big one below. So it's the same story as the other indices - good action but we'll be looking over our shoulders.
BND (bonds / F-fund) moved higher yesterday as yields sank, but the yields came off their lows and bonds came off their highs after a false breakout above the wedge formation. Here too there is a gap that may need to get filled before advancing.
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.
