09/24/25
Stocks got off to another good start yesterday, but it turned out to be a Turnaround Tuesday as the indices flipped over and closed down on the day, possibly triggered by comments from Jerome Powell who suggested stocks may be "fairly, highly valued." Bonds were up modestly on the day as yields moved lower.
The action yesterday wasn't as bad as it may have looked in the indices as the trading volume was actually positive when combining the NYSE trading volume with the Nasdaq volume. That could have just been a result of the selling starting later in the day.
It's no surprise that stocks don't go up everyday, although it feels like that sometimes. The question though is when does a decline start the ball rolling for a more serious decline? For now, the melt-up is still in progress until further notice. The bullish trend is still very much intact and whether Powell's comments about stocks being highly valued triggers a change to some of the trading algorithms, remains to be seen.
The S&P 500 / C-fund backed off from its resistance line again so it is certainly not a warning sign yet, but we know at some point we'll get some kind of a shake out whether that is an outright correction, a test of the 50-day moving average, or just a pullback to the bottom of its narrowing channel. The end of September has a bearish reputation but so far this year the seasonality calendar has been far from useful.
Ironically, the index that has been lagging and perhaps keeping some bulls from being more aggressive, the Dow Transportation Index, was up yesterday but it continues to churn within narrowing support and resistance lines, and it appears that 15,500 / 15,400 are key levels that must hold or investors may have a reason to start selling. The Transports are very economically sensitive so a breakdown below those levels could be very telling.
Oil is also very sensitive to economic conditions, although supply and geological events affect the price as well. Most of the spikes on the above chart are geological in nature but oil has been trending lower for well over a year suggesting either demand is waning, supply is increasing, or both. If it is that demand is waning, that is the bad one.
The futures opened higher on Tuesday evening after a strong earnings report from Micron, but after a day that saw early gains disappear, we'll have to see if there is any profit taking following any positive openings the rest of the week.
We get the PCE Prices data, as well as the Personal Income and Spending reports on Friday, and that may be the most important data point until next week's September jobs report.
The DWCPF (S-fund) was up early but it got flipped around and closed near its lows of the day, making it another false breakout above the ascending channel. However, I don't even think the bulls want it to move that up that quickly. Slow and steady is a better pace for a bull market and as we get into the most volatile period of the year for stocks. What goes up quickly can also come down quickly, and the bulls may not want to rock the boat too much.
ACWX (I-fund) was down slightly and, with the dollar down and the selling coming late yesterday in the US, this index / fund have been spared for a day.
BND (bonds / F-fund) was up moderately yesterday but it remains below resistance, but above that open gap.
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.
Stocks got off to another good start yesterday, but it turned out to be a Turnaround Tuesday as the indices flipped over and closed down on the day, possibly triggered by comments from Jerome Powell who suggested stocks may be "fairly, highly valued." Bonds were up modestly on the day as yields moved lower.
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The action yesterday wasn't as bad as it may have looked in the indices as the trading volume was actually positive when combining the NYSE trading volume with the Nasdaq volume. That could have just been a result of the selling starting later in the day.
It's no surprise that stocks don't go up everyday, although it feels like that sometimes. The question though is when does a decline start the ball rolling for a more serious decline? For now, the melt-up is still in progress until further notice. The bullish trend is still very much intact and whether Powell's comments about stocks being highly valued triggers a change to some of the trading algorithms, remains to be seen.
The S&P 500 / C-fund backed off from its resistance line again so it is certainly not a warning sign yet, but we know at some point we'll get some kind of a shake out whether that is an outright correction, a test of the 50-day moving average, or just a pullback to the bottom of its narrowing channel. The end of September has a bearish reputation but so far this year the seasonality calendar has been far from useful.
Ironically, the index that has been lagging and perhaps keeping some bulls from being more aggressive, the Dow Transportation Index, was up yesterday but it continues to churn within narrowing support and resistance lines, and it appears that 15,500 / 15,400 are key levels that must hold or investors may have a reason to start selling. The Transports are very economically sensitive so a breakdown below those levels could be very telling.
Oil is also very sensitive to economic conditions, although supply and geological events affect the price as well. Most of the spikes on the above chart are geological in nature but oil has been trending lower for well over a year suggesting either demand is waning, supply is increasing, or both. If it is that demand is waning, that is the bad one.
The futures opened higher on Tuesday evening after a strong earnings report from Micron, but after a day that saw early gains disappear, we'll have to see if there is any profit taking following any positive openings the rest of the week.
We get the PCE Prices data, as well as the Personal Income and Spending reports on Friday, and that may be the most important data point until next week's September jobs report.
The DWCPF (S-fund) was up early but it got flipped around and closed near its lows of the day, making it another false breakout above the ascending channel. However, I don't even think the bulls want it to move that up that quickly. Slow and steady is a better pace for a bull market and as we get into the most volatile period of the year for stocks. What goes up quickly can also come down quickly, and the bulls may not want to rock the boat too much.
ACWX (I-fund) was down slightly and, with the dollar down and the selling coming late yesterday in the US, this index / fund have been spared for a day.
BND (bonds / F-fund) was up moderately yesterday but it remains below resistance, but above that open gap.
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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