04/01/26
We got the headline driven rally that we knew was likely lurking, but there were a lot of intangibles that should keep the bulls on their toes before declaring it a bottom. The Dow gained over 1100-points, but it was actually the smallest percentage gain of the major indices. So, dead cat bounce, or is a low brewing?
Being March 31, the action could have been related to portfolio managers' window dressing at the end of the quarter, or just reallocating for the new quarter. We have as many questions as ever, although "when is this thing ever going to bounce", has been answered.
In Friday's commentary I said we're all at risk of the volatility because, to paraphrase, the Dow was primed for one of those 1000-point plus kind of days. We just didn't know if it was going to be a washout sell off first, or a rip your face off rally. So whether you were in stocks, or out, the risk was there.
Yesterday's rally erased the losses of Friday and Monday, as well as about half of Thursday's loss so at this point, with the index charts still trending lower and sitting below resistance in many cases, the bears are still in charge to some extent, but it would not take much to change that at this point.
We knew we were potentially a headline away from a possible reversal, but with the price of oil still above $100 and by comparison barely coming down yesterday, there are still a lot of skeptics, and giant rallies are often more prevalent in bear markets than bull markets - because of the tendency for the indices to get overly stretched on the downside in the short-term.
The S&P 500 (C-fund) rallied nearly 3% yesterday, but the chart shows that there is still work to be done as the monster rally only made it up to the top of its recent trading channel, filling in an open gap along the way. It is still below the 200-day average. Trading volume was moderately higher, which is good on an up day, but that could have been related to the end of the quarter as it wasn't overwhelming. However, it is something, and a bottom has to start somewhere.
I mentioned in Tuesday's TSP Talk Plus Report that we did get some modest clues after Monday's selling that something could be changing as the VIX was down on Monday despite the big loss in the indices, plus yields were down sharply helping the High Yield Corporate Bonds / credit market chart show signs of life after bouncing off its 200-day average. But it wasn't obvious and not something to act on, but now Tuesday's action adds to that.
The 10-year Treasury Yield fell again yesterday and it is now below a couple of broken support lines, suggesting there could be more room on the downside - perhaps down to the moving average below.
That decline in yields meant gains for the F-fund (BND) yesterday. Nothing dramatic, and it is still below the old broken support line, so like many charts we will view today, it needs more help.
We know that President Trump could make or break the rally with an announcement or two, but hopefully the charts will confirm the news and the direction of the market for more than a day or two.
This could be pre-holiday activity where the market trend can reverse before a major market holiday, then resume that larger trend afterward, so that is always a possibility.
We will get the March jobs report on Friday. Estimates are looking for a gain of about 55,000 jobs and an unemployment rate of 4.4%.
Despite the jobs report, the stock market will be closed on Friday, as well as the TSP, so we will not be posting any updates that day.
From tsp.gov: "Holiday Closing - Some financial markets will be closed on Friday, April 3, in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (April 3) will be processed Monday night (April 6) at Monday's closing share prices."
Congratulations to Tailgate, Udflyer01, and FLtiger for taking down the top 3 spots in the AutoTracker in March with returns of +2.20%, +1.60%, and +1.11% respectively! More information.
Additional TSP Fund Charts:
DWCPF (S-fund) gained 3.4%, a big day indeed, and these kind of one day rallies usually come after a lot of damage has been done, so it doesn't mean too much yet without some follow-through. There is still plenty of resistance overhead so it needs to show us more.
ACWX (I-fund) also ran up to resistance after a 3.3% gain. Look at that area near 68.50. That's the pivot point of all pivot points. I would say oil needs to fall today to see a breakout here, but then again, oil didn't fall much yesterday so which market was right -- the oil market or the stock market? We may find out today.
Thanks so much for reading! 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.
We got the headline driven rally that we knew was likely lurking, but there were a lot of intangibles that should keep the bulls on their toes before declaring it a bottom. The Dow gained over 1100-points, but it was actually the smallest percentage gain of the major indices. So, dead cat bounce, or is a low brewing?
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Being March 31, the action could have been related to portfolio managers' window dressing at the end of the quarter, or just reallocating for the new quarter. We have as many questions as ever, although "when is this thing ever going to bounce", has been answered.
In Friday's commentary I said we're all at risk of the volatility because, to paraphrase, the Dow was primed for one of those 1000-point plus kind of days. We just didn't know if it was going to be a washout sell off first, or a rip your face off rally. So whether you were in stocks, or out, the risk was there.
Yesterday's rally erased the losses of Friday and Monday, as well as about half of Thursday's loss so at this point, with the index charts still trending lower and sitting below resistance in many cases, the bears are still in charge to some extent, but it would not take much to change that at this point.
We knew we were potentially a headline away from a possible reversal, but with the price of oil still above $100 and by comparison barely coming down yesterday, there are still a lot of skeptics, and giant rallies are often more prevalent in bear markets than bull markets - because of the tendency for the indices to get overly stretched on the downside in the short-term.
The S&P 500 (C-fund) rallied nearly 3% yesterday, but the chart shows that there is still work to be done as the monster rally only made it up to the top of its recent trading channel, filling in an open gap along the way. It is still below the 200-day average. Trading volume was moderately higher, which is good on an up day, but that could have been related to the end of the quarter as it wasn't overwhelming. However, it is something, and a bottom has to start somewhere.
I mentioned in Tuesday's TSP Talk Plus Report that we did get some modest clues after Monday's selling that something could be changing as the VIX was down on Monday despite the big loss in the indices, plus yields were down sharply helping the High Yield Corporate Bonds / credit market chart show signs of life after bouncing off its 200-day average. But it wasn't obvious and not something to act on, but now Tuesday's action adds to that.
The 10-year Treasury Yield fell again yesterday and it is now below a couple of broken support lines, suggesting there could be more room on the downside - perhaps down to the moving average below.
That decline in yields meant gains for the F-fund (BND) yesterday. Nothing dramatic, and it is still below the old broken support line, so like many charts we will view today, it needs more help.
We know that President Trump could make or break the rally with an announcement or two, but hopefully the charts will confirm the news and the direction of the market for more than a day or two.
This could be pre-holiday activity where the market trend can reverse before a major market holiday, then resume that larger trend afterward, so that is always a possibility.
We will get the March jobs report on Friday. Estimates are looking for a gain of about 55,000 jobs and an unemployment rate of 4.4%.
Despite the jobs report, the stock market will be closed on Friday, as well as the TSP, so we will not be posting any updates that day.
From tsp.gov: "Holiday Closing - Some financial markets will be closed on Friday, April 3, in observance of Good Friday. Consequently, the Thrift Savings Plan will not be updating share prices in any of the TSP funds for that day. Transactions that would have been processed Friday night (April 3) will be processed Monday night (April 6) at Monday's closing share prices."
Congratulations to Tailgate, Udflyer01, and FLtiger for taking down the top 3 spots in the AutoTracker in March with returns of +2.20%, +1.60%, and +1.11% respectively! More information.
Additional TSP Fund Charts:
DWCPF (S-fund) gained 3.4%, a big day indeed, and these kind of one day rallies usually come after a lot of damage has been done, so it doesn't mean too much yet without some follow-through. There is still plenty of resistance overhead so it needs to show us more.
ACWX (I-fund) also ran up to resistance after a 3.3% gain. Look at that area near 68.50. That's the pivot point of all pivot points. I would say oil needs to fall today to see a breakout here, but then again, oil didn't fall much yesterday so which market was right -- the oil market or the stock market? We may find out today.
Thanks so much for reading! 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.
