06/30/25
Stocks rallied on Friday as the stock market continued to react to the positive framework of a trade deal with China, but the new highs in the S&P 500 did trigger some midday selling as news of trouble in the Canadian tariff situation gave reason for some profit taking at the highs. Buying did resume in the final hour of trading and we got the new closing high in the S&P and Nasdaq. Bonds were down as yields and the dollar rallied on a hotter than expected PCE Prices report.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The PCE Prices and the Income and Spending reports did show some heat and that impacted the bond market, but stocks barely blinked, and as I said, we closed at all time highs. Technically there is still time for a double top pullback despite one day above the old highs, and this week could either be very interesting, or very benign, depending on which story wants to repeat itself.
Historically pre-holiday reversals that deviate from the larger trend can occur before a long holiday weekend, but the days leading up to the 4th of July have a very bullish bias. There is also a trend of the market doing well in the first half of July if June is strong month, which it has been.
The S&P 500 (C-fund) did make new highs as that dashed horizontal red line was the old high in February. I don't know how it will play out but if I had to guess, we could see this move up for the next several days, then pullback to retest that breakout area again. One reason that typical technical move may not occur is the amount of cash on the sidelines from money managers that are still underinvested and lagging the market averages. There may be a capitulation from these bears as we start the second half of the year.
The Dow Transportation Index broke above its bullish looking inverted head and shoulders pattern late last week, but it is now facing its 200-day EMA, which can be a rally killer. You can see that it can be stubborn support or resistance, depending on whether it is trading above or below that line. The Transports are considered a market leader as it is very economically sensitive, so what happens near 15,500 matters. The price of oil may be a key factor here as transportation related companies tend to do better when fuel prices are falling.
Last week we had an unusual move in the price of oil, which of course is not surprising given the outcome (so far) of the Israel / Iran conflict. We mentioned this last week, but look at the size of the negative outside reversal day last Monday. There hasn't been much of a bounce since so this may be a good sign for the stock market.
According to sentimentrader.com, "Since 1985, when oil experiences an intraday reversal like it did last week, the S&P 500 has been higher 12 months later 100% of the time, with a median gain of 29%."
Source: www.sentimenTrader.com
Only in 2008 - 2009 did it show any negative tendencies going out any time frame.
The 10-year Treasury Yield and the dollar were up Friday following the inflation data, but both had been fallen hard leading up to that report and it may just be a relief rally.
It's a holiday shortened week and with Friday being the holiday, we will get a rare Thursday monthly jobs report. Estimates are looking for a gain of 120,000 jobs with an unemployment rate of 4.2%. A weaker than expected report may actually get some bullish attention as the Fed may be more likely to cut interest rates if there are signs of a weakening labor market.
The DWCPF / S-fund tried to break out above its wedge formation, but like the failed breakdown on Monday, Friday was a failed breakout. There is also an open gap down by the bottom of the wedge so it could be in play this week on any weakness.
The longer-term chart suggests good things are happening in the S-fund but getting above 2300 is its next job. 2350 is a breakdown candlestick from February that could be the next target if it can ever break out of that wedge.
The ACWX (I-fund) was up on Friday making a new high despite a rally in the dollar. The bottom of that broken channel is still holding as resistance, but that resistance is rising.
The dollar managed to climb back above its double bottom after falling below that support on Thursday. The negative reversal day suggests it could go lower, but some backing and filling on the upside in the short-term during a pre-holiday week is very possible.
BND (bonds / F-fund) rolled over after the PCE report came out on Friday. Technically it's not an issue yet unless it falls back within that red channel. For now I would expect that old resistance to act as support.
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 may use additional methods and strategies to determine fund positions.
Stocks rallied on Friday as the stock market continued to react to the positive framework of a trade deal with China, but the new highs in the S&P 500 did trigger some midday selling as news of trouble in the Canadian tariff situation gave reason for some profit taking at the highs. Buying did resume in the final hour of trading and we got the new closing high in the S&P and Nasdaq. Bonds were down as yields and the dollar rallied on a hotter than expected PCE Prices report.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The PCE Prices and the Income and Spending reports did show some heat and that impacted the bond market, but stocks barely blinked, and as I said, we closed at all time highs. Technically there is still time for a double top pullback despite one day above the old highs, and this week could either be very interesting, or very benign, depending on which story wants to repeat itself.
Historically pre-holiday reversals that deviate from the larger trend can occur before a long holiday weekend, but the days leading up to the 4th of July have a very bullish bias. There is also a trend of the market doing well in the first half of July if June is strong month, which it has been.
The S&P 500 (C-fund) did make new highs as that dashed horizontal red line was the old high in February. I don't know how it will play out but if I had to guess, we could see this move up for the next several days, then pullback to retest that breakout area again. One reason that typical technical move may not occur is the amount of cash on the sidelines from money managers that are still underinvested and lagging the market averages. There may be a capitulation from these bears as we start the second half of the year.
The Dow Transportation Index broke above its bullish looking inverted head and shoulders pattern late last week, but it is now facing its 200-day EMA, which can be a rally killer. You can see that it can be stubborn support or resistance, depending on whether it is trading above or below that line. The Transports are considered a market leader as it is very economically sensitive, so what happens near 15,500 matters. The price of oil may be a key factor here as transportation related companies tend to do better when fuel prices are falling.
Last week we had an unusual move in the price of oil, which of course is not surprising given the outcome (so far) of the Israel / Iran conflict. We mentioned this last week, but look at the size of the negative outside reversal day last Monday. There hasn't been much of a bounce since so this may be a good sign for the stock market.
According to sentimentrader.com, "Since 1985, when oil experiences an intraday reversal like it did last week, the S&P 500 has been higher 12 months later 100% of the time, with a median gain of 29%."
Source: www.sentimenTrader.com
Only in 2008 - 2009 did it show any negative tendencies going out any time frame.
The 10-year Treasury Yield and the dollar were up Friday following the inflation data, but both had been fallen hard leading up to that report and it may just be a relief rally.
It's a holiday shortened week and with Friday being the holiday, we will get a rare Thursday monthly jobs report. Estimates are looking for a gain of 120,000 jobs with an unemployment rate of 4.2%. A weaker than expected report may actually get some bullish attention as the Fed may be more likely to cut interest rates if there are signs of a weakening labor market.
The DWCPF / S-fund tried to break out above its wedge formation, but like the failed breakdown on Monday, Friday was a failed breakout. There is also an open gap down by the bottom of the wedge so it could be in play this week on any weakness.
The longer-term chart suggests good things are happening in the S-fund but getting above 2300 is its next job. 2350 is a breakdown candlestick from February that could be the next target if it can ever break out of that wedge.
The ACWX (I-fund) was up on Friday making a new high despite a rally in the dollar. The bottom of that broken channel is still holding as resistance, but that resistance is rising.
The dollar managed to climb back above its double bottom after falling below that support on Thursday. The negative reversal day suggests it could go lower, but some backing and filling on the upside in the short-term during a pre-holiday week is very possible.
BND (bonds / F-fund) rolled over after the PCE report came out on Friday. Technically it's not an issue yet unless it falls back within that red channel. For now I would expect that old resistance to act as support.
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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