05/01/26
Another amazing rally for the stock market despite the tug-o-war with some Magnificent 7 stocks. The rally was broad with small caps leading, so who cares about the Mag 7, right? We'll see. Oil was down some yesterday, helping the rally's cause. Yields and the dollar were also down yesterday on better than expected inflation data.
Apple was trading pretty flat, staying with +/- 1%, initially after reporting earnings after the closing bell on Thursday, but shot up about 3% just before their conference call started. It had been up about 10% off the lows leading up to this report so, as I asked about other Mag 7 companies, is this a "sell the news" situation? It was for some, but not for others.
The gain in Google yesterday, as the 5th and 6th heaviest weighted stocks (GOOG and GOOGL) in the S&P 500, was the key move yesterday. It has had these type of gap up before and actually did well after some. It is currently trading near the top of its 1+ year trading channel.
The heaviest weighted company (Nvidia) was down sharply yesterday, as was #3 Microsoft, and #2 Apple was down slightly. META should have also been a drag at -.8.5%, but you would have never known it, so maybe the broader index was that strong?
Yesterday's top 9 weighted S&P 500 stocks.
According to @jasongoepfert of sentimentrader.com:
"Here's every time the tech sector had a +20% monthly total return at an all-time high."
Click chart for source
I don't want to be bearish, but this is getting somewhat concerning. The momentum may mean that the market won't pay the piper for some time. It could be weeks, months, or even years as you can see in the chart above that the distance between the red arrow signals and the peak that followed was not very much, but time wise it could be months since this chart goes back 100 years.
The S&P 500 (C-fund) just pulled off the second best April ever. Of course that came on the heals of a poor March and much of the gain was recovering those March losses, but this was impressive in both size (gain) and duration (quick) of the rally. Now, the question is whether this is sustainable?
Yesterday the price of oil slipped after a big two-day rally. Technically we can still call this a head and shoulders pattern, but the higher it goes, the less that will be the case as the shoulder either finishes, or becomes some kind of cup formation instead, which would be more bullish for oil.
The 10-year Treasury Yield was down yesterday. The rally in oil hurt the PCE Prices inflation data but the Core PCE data, which excludes the more volatile food and energy sector, came in lower than expected. So, the yield was down, but it is still trending higher.
The market leading Dow Transportation Index stopped going down for day but it remains in correction mode. It pushed up to the 20-day moving average, which held as resistance. That average had been strong support during most of the way up this year.
Magnificent 7 stocks are done reporting except for Nvidia, which reports on May 20.
Is it time to "Sell in May and go away?" It wasn't last year at this time.
Additional TSP Fund Charts:
DWCPF (S-fund) blasted off after successfully filling the open gap by 2630 the day before. This looks good as it may be a bull flag ready to break out, but it is still just slightly above where it was at the January peak, and it is nearing the top of the longer-term trading channel.
ACWX (I-fund) came along for the ride yesterday with the dollar and the price of oil down yesterday. This one did break its recent descending resistance after completing the retracing of that that large upside candlestick on April 13.
The dollar broke down from a rising support line yesterday.
BND (bonds / F-fund) was up but it is still floundering below support.
Thanks so much for reading! Have a great weekend!
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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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.
Another amazing rally for the stock market despite the tug-o-war with some Magnificent 7 stocks. The rally was broad with small caps leading, so who cares about the Mag 7, right? We'll see. Oil was down some yesterday, helping the rally's cause. Yields and the dollar were also down yesterday on better than expected inflation data.
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Apple was trading pretty flat, staying with +/- 1%, initially after reporting earnings after the closing bell on Thursday, but shot up about 3% just before their conference call started. It had been up about 10% off the lows leading up to this report so, as I asked about other Mag 7 companies, is this a "sell the news" situation? It was for some, but not for others.
The gain in Google yesterday, as the 5th and 6th heaviest weighted stocks (GOOG and GOOGL) in the S&P 500, was the key move yesterday. It has had these type of gap up before and actually did well after some. It is currently trading near the top of its 1+ year trading channel.
The heaviest weighted company (Nvidia) was down sharply yesterday, as was #3 Microsoft, and #2 Apple was down slightly. META should have also been a drag at -.8.5%, but you would have never known it, so maybe the broader index was that strong?
Yesterday's top 9 weighted S&P 500 stocks.
According to @jasongoepfert of sentimentrader.com:
"Here's every time the tech sector had a +20% monthly total return at an all-time high."
Click chart for source
I don't want to be bearish, but this is getting somewhat concerning. The momentum may mean that the market won't pay the piper for some time. It could be weeks, months, or even years as you can see in the chart above that the distance between the red arrow signals and the peak that followed was not very much, but time wise it could be months since this chart goes back 100 years.
The S&P 500 (C-fund) just pulled off the second best April ever. Of course that came on the heals of a poor March and much of the gain was recovering those March losses, but this was impressive in both size (gain) and duration (quick) of the rally. Now, the question is whether this is sustainable?
Yesterday the price of oil slipped after a big two-day rally. Technically we can still call this a head and shoulders pattern, but the higher it goes, the less that will be the case as the shoulder either finishes, or becomes some kind of cup formation instead, which would be more bullish for oil.
The 10-year Treasury Yield was down yesterday. The rally in oil hurt the PCE Prices inflation data but the Core PCE data, which excludes the more volatile food and energy sector, came in lower than expected. So, the yield was down, but it is still trending higher.
The market leading Dow Transportation Index stopped going down for day but it remains in correction mode. It pushed up to the 20-day moving average, which held as resistance. That average had been strong support during most of the way up this year.
Magnificent 7 stocks are done reporting except for Nvidia, which reports on May 20.
Is it time to "Sell in May and go away?" It wasn't last year at this time.
Additional TSP Fund Charts:
DWCPF (S-fund) blasted off after successfully filling the open gap by 2630 the day before. This looks good as it may be a bull flag ready to break out, but it is still just slightly above where it was at the January peak, and it is nearing the top of the longer-term trading channel.
ACWX (I-fund) came along for the ride yesterday with the dollar and the price of oil down yesterday. This one did break its recent descending resistance after completing the retracing of that that large upside candlestick on April 13.
The dollar broke down from a rising support line yesterday.
BND (bonds / F-fund) was up but it is still floundering below support.
Thanks so much for reading! Have a great weekend!
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
Updated monthly:
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.
