07/25/25
Stocks were mixed on Thursday as the S&P 500 and Nasdaq both closed at another record high yesterday, but they closed near the lows of the day after a late sell off. The Dow lost over 300-points, but it was basically three stocks, IBM, Unitedhealth, and Honeywell, that did most of the damage. Bonds and the dollar were up and that put pressure on the small caps (S-fund), the I-fund, and the F-fund.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
Google (aka Alphabet) was up yesterday after their earnings report, but the market took their cue from this chart and closed near the lows of the day.
Internally the market breadth was negative, including the NYSE share volume, but I suspect the heavy trading in Google, as well as Nvidia, helped keep the Nasdaq's volume stay quite positive.
The S&P 500 (C-fund) continues to climb the wall of worry, if we want to keep calling it that, but that a 2nd negative reversal day in the last four trading days, and a 3rd in 8 days. So far it hasn't hurt the index, but it's not generally a good look.
The S&P 500 continues to trade above its 20-day EMA and it has now closed above it for the most consecutive days since 1998.
Back in 1998 we saw a couple of similar streaks. In mid-1998 it ended with a modest consolidation that lasted for a couple of months. There was another long stretch later that year that just came back to tag the average and head right back up. In between the two there was a correction, but that had nothing to do with the 20-day average.
By the way, as a side note, the S&P 500 closed over 1220 at the end of 1998. In March of 2009, over 10 years later, it hit a low of 666. Buy and hold works in the long run, but if you do hold, you better be prepared for major swings in your account balance. If you can avoid some of those draw downs you'd be better off, but it's easier said than done.
Back then, in 1998 - 1999, we were seeing the S&P 500 Price to Earnings ratios in the upper 20's before that bubble finally burst. We are currently at the highest P/E ratio since then.
Source:
I'm not getting bearish yet. I could see getting a pullback in the not so different future, even if its just down to that 20-day average, but we know it's just a matter of time before something more severe occurs, whether later this summer, or months or years from now. But it is coming. I may not be able to time it perfectly, but I'm not going to sit on my hands and have them rip my account to shreds.
The DWCPF / S-fund pulled back yesterday, and as we talked about in Thursday's commentary, filling that gap would give back Wednesday's gains. It is still slightly open and there is more support below that gap.
ACWX (I-fund) also gave back a chunk of Wednesday's gains, but it remains in the trading channel, which is still moving upward. There is an open gap near 61.50 which could give the bears a reason to push this lower in the coming days.
BND (bonds / F-fund) was down but it found support after filling that open gap, and bounced off its lows. It seems to be making a lower high, and that's a concern, but with the higher low and the 50-day EMA holding, it could be making some kind of flag or pennant like formation as well, which might be more bullish.
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
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 were mixed on Thursday as the S&P 500 and Nasdaq both closed at another record high yesterday, but they closed near the lows of the day after a late sell off. The Dow lost over 300-points, but it was basically three stocks, IBM, Unitedhealth, and Honeywell, that did most of the damage. Bonds and the dollar were up and that put pressure on the small caps (S-fund), the I-fund, and the F-fund.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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Google (aka Alphabet) was up yesterday after their earnings report, but the market took their cue from this chart and closed near the lows of the day.
Internally the market breadth was negative, including the NYSE share volume, but I suspect the heavy trading in Google, as well as Nvidia, helped keep the Nasdaq's volume stay quite positive.
The S&P 500 (C-fund) continues to climb the wall of worry, if we want to keep calling it that, but that a 2nd negative reversal day in the last four trading days, and a 3rd in 8 days. So far it hasn't hurt the index, but it's not generally a good look.
The S&P 500 continues to trade above its 20-day EMA and it has now closed above it for the most consecutive days since 1998.
Back in 1998 we saw a couple of similar streaks. In mid-1998 it ended with a modest consolidation that lasted for a couple of months. There was another long stretch later that year that just came back to tag the average and head right back up. In between the two there was a correction, but that had nothing to do with the 20-day average.
By the way, as a side note, the S&P 500 closed over 1220 at the end of 1998. In March of 2009, over 10 years later, it hit a low of 666. Buy and hold works in the long run, but if you do hold, you better be prepared for major swings in your account balance. If you can avoid some of those draw downs you'd be better off, but it's easier said than done.
Back then, in 1998 - 1999, we were seeing the S&P 500 Price to Earnings ratios in the upper 20's before that bubble finally burst. We are currently at the highest P/E ratio since then.
Source:
I'm not getting bearish yet. I could see getting a pullback in the not so different future, even if its just down to that 20-day average, but we know it's just a matter of time before something more severe occurs, whether later this summer, or months or years from now. But it is coming. I may not be able to time it perfectly, but I'm not going to sit on my hands and have them rip my account to shreds.
The DWCPF / S-fund pulled back yesterday, and as we talked about in Thursday's commentary, filling that gap would give back Wednesday's gains. It is still slightly open and there is more support below that gap.
ACWX (I-fund) also gave back a chunk of Wednesday's gains, but it remains in the trading channel, which is still moving upward. There is an open gap near 61.50 which could give the bears a reason to push this lower in the coming days.
BND (bonds / F-fund) was down but it found support after filling that open gap, and bounced off its lows. It seems to be making a lower high, and that's a concern, but with the higher low and the 50-day EMA holding, it could be making some kind of flag or pennant like formation as well, which might be more bullish.
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
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.
