05/05/26
The stock market took a moderate hit on Monday as the price of oil moved up again following military conflict in the Strait of Hormuz. Along with oil, yields and the dollar moved up as well, and this all added up to red in all all sectors of the S&P 500 except energy.
Conflict escalated in the Strait of Hormuz and President Trump said, "Iran has been given only 24 hours. After that, the world may witness one of the most devastating air strikes ever seen." That sent the price of oil to an uncomfortable $105 a barrel, although not quite to last week's highs.
Yields moved up on the rally in oil as the 10-year Treasury Yield closed at its highest level since last July.
These are weighing on the stock market, although the indices have been fairly resilient despite these negative catalysts.
The S&P 500 (C-fund) did follow Friday's negative reversal day with a down day on Monday, which is good - not because stocks went down, but rather it is nice to see textbook reaction to technical analysis signals. Negative reversal days tend to beget more downside in the short-term. The "F" flag we see here is bullish until it is not. They often break to the downside, but sometimes they stay within the flag longer than we expect.
DWCPF (S-fund) not only was down following Friday's negative reversal day, but it has now created a negative outside reversal day. That's where we see a higher high over the prior day, and a lower low, with a close below the prior day's close. These tend to be even more bearish for the short-term, and can actually cause intermediate term shifts in some cases. Otherwise, there is strong support near 2660 that may be in play this week.
More bad news for the market leading Dow Transportation Index yesterday as it fell almost 5% after failing to get back above its 20-day moving average last week.
That's one ugly looking chart. The initial rally and correction was caused some massive swings in Avis (CAR) due to a short squeeze, so I tried to take that with a grain of salt, but this new sell off has to do with UPS and FedEx concerns as Amazon may be treading on their businesses.
We'll get the April Jobs Report on Friday this week and estimates are looking for a gain of 60,000 to 95,000 jobs with an unemployment rate of 4.3%.
Additional TSP Fund Charts:
ACWX (I-fund) pulled back 1% yesterday potentially creating a lower high but for now that wouldn't be official unless it falls below last week's low, creating a lower low. The 20-day average is getting tested again, and it has been strong support again. The open gap is clearly there for the bears to take, and that may depend on how high the price of oil goes.
BND (bonds / F-fund) dropped again as the trend has been down for more than a couple of weeks now. It too has a gap that may need filling, and like the I-fund, higher oil prices may be the catalyst to fill that.
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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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.
The stock market took a moderate hit on Monday as the price of oil moved up again following military conflict in the Strait of Hormuz. Along with oil, yields and the dollar moved up as well, and this all added up to red in all all sectors of the S&P 500 except energy.
| Daily TSP Funds Return More returns |
Conflict escalated in the Strait of Hormuz and President Trump said, "Iran has been given only 24 hours. After that, the world may witness one of the most devastating air strikes ever seen." That sent the price of oil to an uncomfortable $105 a barrel, although not quite to last week's highs.
Yields moved up on the rally in oil as the 10-year Treasury Yield closed at its highest level since last July.
These are weighing on the stock market, although the indices have been fairly resilient despite these negative catalysts.
The S&P 500 (C-fund) did follow Friday's negative reversal day with a down day on Monday, which is good - not because stocks went down, but rather it is nice to see textbook reaction to technical analysis signals. Negative reversal days tend to beget more downside in the short-term. The "F" flag we see here is bullish until it is not. They often break to the downside, but sometimes they stay within the flag longer than we expect.
DWCPF (S-fund) not only was down following Friday's negative reversal day, but it has now created a negative outside reversal day. That's where we see a higher high over the prior day, and a lower low, with a close below the prior day's close. These tend to be even more bearish for the short-term, and can actually cause intermediate term shifts in some cases. Otherwise, there is strong support near 2660 that may be in play this week.
More bad news for the market leading Dow Transportation Index yesterday as it fell almost 5% after failing to get back above its 20-day moving average last week.
That's one ugly looking chart. The initial rally and correction was caused some massive swings in Avis (CAR) due to a short squeeze, so I tried to take that with a grain of salt, but this new sell off has to do with UPS and FedEx concerns as Amazon may be treading on their businesses.
We'll get the April Jobs Report on Friday this week and estimates are looking for a gain of 60,000 to 95,000 jobs with an unemployment rate of 4.3%.
Additional TSP Fund Charts:
ACWX (I-fund) pulled back 1% yesterday potentially creating a lower high but for now that wouldn't be official unless it falls below last week's low, creating a lower low. The 20-day average is getting tested again, and it has been strong support again. The open gap is clearly there for the bears to take, and that may depend on how high the price of oil goes.
BND (bonds / F-fund) dropped again as the trend has been down for more than a couple of weeks now. It too has a gap that may need filling, and like the I-fund, higher oil prices may be the catalyst to fill that.
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
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.
