Stocks were mostly flat on Friday heading into the long weekend, but over the weekend there was some news that had the futures struggling heading into Tuesday's opening bell. Last week was mixed with The C-fund down modestly, while the S and I-funds each gained over 1%.
More tariff headlines sent the futures lower over the weekend as Trump threatened some European countries with increased tariffs based on support over Greenland, and those European countries said they would reciprocate. This is all coming with the decision on the legality of Trumps tariffs from the Supreme Court, still pending.
The S&P 500 (C-fund) has been hanging around the recent highs, but it hasn't brought in a whole lot of new money recently, or so it seems, as the consolidation since the October highs is getting close to three months old. Consolidations are usually very productive, but since this has made new highs, but has not broken out with any conviction, I am torn between the potential Wyckoff distribution pattern being formed, as we talked about last week, and...
Wyckoff distribution pattern:
... the very bullish setup in theDWCPF (S-fund), which is a bull flag within another much larger bull flag, that has huge potential. The question is whether small caps can rally if the S&P 500 is following the path in the Wyckoff distribution pattern above. Probably not, so the S&P needs to hold.
The 10-year Treasury Yield finally made a move and it was in the direction that a bull flag is expected to follow. Up. Not surprising, but I suppose what is surprising is that the small caps barely blinked, and still outperformed the large caps despite the start of what could be a new leg higher in the 10-year.
The dollar has been quite positive the last few weeks, and it has been trending higher since the lows in July, but that hasn't stopped the I-fund from outperforming over the last year, as we might expect.
There is an open gap just above 27.75, which could be a target for this current rally, although there is some immediate resistance at last week's highs.
Investors have been getting more bullish - finally, after being neutral, if not bearish, for most of the rally off the April 2025 lows. Stocks tend to rally when bullish sentiment is moving upward, but it is less bullish once this reaches an extreme, but we're not at that point yet.
Admin note: We are having an annual subscription sale this week for new or current subscribers! As always, if you have an annual subscription that does not expire this month, or if you want to convert a monthly subscription to annual, the sale will allow you to tack on an additional year or two to your current subscriptions at the sale price.
As you can imagine, the cost of doing business has risen quite a bit over the past 20 years. Over that time the price of TSP Talk Plus and RevShark's Premium Services have remained the same, and we are planning a modest price increase later this year. This sale provides you and your friends the opportunity to lock in prices that we may not be able to offer again. Spread the word to anyone who you think would benefit from a TSP Talk Premium Subscription.
The ACWX (I-fund index) is really over performing, especially with the dollar rallying for the last three weeks. I don't know if it will be tariff related, but this certainly has several good reasons to do some backing and filling in the short-term
BND (bonds / F-fund) took a hard hit in the final two days of trading last week with the 10-yer Treasury Yield finally breaking out to the upside of its bull flag (see top section.) Should that bull flag continue to push yields highs, this chart could easily come down to test that 50-day average again, in which case the bullish case for the F-fund would get more sketchy.
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.
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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.
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More tariff headlines sent the futures lower over the weekend as Trump threatened some European countries with increased tariffs based on support over Greenland, and those European countries said they would reciprocate. This is all coming with the decision on the legality of Trumps tariffs from the Supreme Court, still pending.
The S&P 500 (C-fund) has been hanging around the recent highs, but it hasn't brought in a whole lot of new money recently, or so it seems, as the consolidation since the October highs is getting close to three months old. Consolidations are usually very productive, but since this has made new highs, but has not broken out with any conviction, I am torn between the potential Wyckoff distribution pattern being formed, as we talked about last week, and...
Wyckoff distribution pattern:
... the very bullish setup in theDWCPF (S-fund), which is a bull flag within another much larger bull flag, that has huge potential. The question is whether small caps can rally if the S&P 500 is following the path in the Wyckoff distribution pattern above. Probably not, so the S&P needs to hold.
The 10-year Treasury Yield finally made a move and it was in the direction that a bull flag is expected to follow. Up. Not surprising, but I suppose what is surprising is that the small caps barely blinked, and still outperformed the large caps despite the start of what could be a new leg higher in the 10-year.
The dollar has been quite positive the last few weeks, and it has been trending higher since the lows in July, but that hasn't stopped the I-fund from outperforming over the last year, as we might expect.
There is an open gap just above 27.75, which could be a target for this current rally, although there is some immediate resistance at last week's highs.
Investors have been getting more bullish - finally, after being neutral, if not bearish, for most of the rally off the April 2025 lows. Stocks tend to rally when bullish sentiment is moving upward, but it is less bullish once this reaches an extreme, but we're not at that point yet.
Admin note: We are having an annual subscription sale this week for new or current subscribers! As always, if you have an annual subscription that does not expire this month, or if you want to convert a monthly subscription to annual, the sale will allow you to tack on an additional year or two to your current subscriptions at the sale price.
As you can imagine, the cost of doing business has risen quite a bit over the past 20 years. Over that time the price of TSP Talk Plus and RevShark's Premium Services have remained the same, and we are planning a modest price increase later this year. This sale provides you and your friends the opportunity to lock in prices that we may not be able to offer again. Spread the word to anyone who you think would benefit from a TSP Talk Premium Subscription.
The ACWX (I-fund index) is really over performing, especially with the dollar rallying for the last three weeks. I don't know if it will be tariff related, but this certainly has several good reasons to do some backing and filling in the short-term
BND (bonds / F-fund) took a hard hit in the final two days of trading last week with the 10-yer Treasury Yield finally breaking out to the upside of its bull flag (see top section.) Should that bull flag continue to push yields highs, this chart could easily come down to test that 50-day average again, in which case the bullish case for the F-fund would get more sketchy.
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 use additional methods and strategies to determine fund positions.
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