04/16/26
The Dow was down, but the S&P 500, and particularly the Nasdaq, soared to new all time highs yesterday. That was quite a recovery and one of the fastest 11% rallies we've seen in a long time. It took 53 days to go from the all-time high in January, to a 9% plus drawdown, and back to all time highs. The last time we saw shorter recoveries was in 2020 when we had a 50 day similar drop and pop, and before that it happened in 1997. It actually happened twice that year.
Quick recoveries like this don't necessarily mean that the market is going to continue to go straight up, but momentum can be tough to stop, and rallies tend to last longer than we expect. However, this data from Capital Context shows that bullish activity going forward isn't guaranteed.
Click chart for source:
As a matter of fact, if you look at those prior dates, most came during years of severe volatility and bear markets - worse than what we just went through, although I'm not thinking about a bear market with the indices at new highs.
Can you guess what this chart is? It looks like a nice steady rally.
Well, it is actually a four year monthly chart of the S&P 500, without the intra-month noise of volatility.
The month is not over yet so it's possible that the chart may not look like this on April 30, but if it does we can see that other breakouts led to another leg higher in recent years.
The daily chart of the S&P 500 (C-fund) hit new highs and closed above 7000 for the first time ever. New highs are never a bad thing, but it can be common for folks who have gotten their money back from the losses since the previous highs, to take some profits.
Yields were up slightly and the dollar (UUP) has now been down for 10 of the last 11 days.
The price of oil was fairly flat yesterday by the close, but look where the pullback hit and held -- the 50-day moving average. This could be troublesome if it turns out to be a supported low. But as I pointed out yesterday, that does look like a head and shoulders pattern and it could just be in a right shoulder right now, which would tend to lead to a breakdown.
In recent months we showed a series of Hindenburg Omen Signals, and the Wyckoff Distribution pattern, both of which suggested a downswing was coming, and the midterm seasonality calendar suggested a potential sell off in March with a low at the end of March, but a rally to new highs into mid-to-late April. I'm sure none of us played it perfectly, but we had the info.
Should we take this chart seriously now - in the mid-to-late part of April? A friend of mine wants to know.
Additional TSP Fund Charts:
DWCPF (S-fund) didn't quite have the day that the S&P 500 had, mostly because the large cap indices were led by the large cap tech stocks. The index hit the February highs and held, and as I said the other day, this could be the area where we see a right shoulder of a bullish inverted head and shoulders form. Perhaps here, or maybe it tests the January highs first, but some kind of consolidation would not be a bad thing here.
ACWX (I-fund) actually closed down yesterday, perhaps because oil stopped going down, or because the I-fund was already up 8.6% in the first half of the month. Open gaps on both sides opens the door for some potential swings.
BND (bonds / F-fund) was down on higher yields but so far it has held the breakout above the wedge.
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
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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 Dow was down, but the S&P 500, and particularly the Nasdaq, soared to new all time highs yesterday. That was quite a recovery and one of the fastest 11% rallies we've seen in a long time. It took 53 days to go from the all-time high in January, to a 9% plus drawdown, and back to all time highs. The last time we saw shorter recoveries was in 2020 when we had a 50 day similar drop and pop, and before that it happened in 1997. It actually happened twice that year.
| Daily TSP Funds Return More returns |
Quick recoveries like this don't necessarily mean that the market is going to continue to go straight up, but momentum can be tough to stop, and rallies tend to last longer than we expect. However, this data from Capital Context shows that bullish activity going forward isn't guaranteed.
Click chart for source:
As a matter of fact, if you look at those prior dates, most came during years of severe volatility and bear markets - worse than what we just went through, although I'm not thinking about a bear market with the indices at new highs.
Can you guess what this chart is? It looks like a nice steady rally.
Well, it is actually a four year monthly chart of the S&P 500, without the intra-month noise of volatility.
The month is not over yet so it's possible that the chart may not look like this on April 30, but if it does we can see that other breakouts led to another leg higher in recent years.
The daily chart of the S&P 500 (C-fund) hit new highs and closed above 7000 for the first time ever. New highs are never a bad thing, but it can be common for folks who have gotten their money back from the losses since the previous highs, to take some profits.
Yields were up slightly and the dollar (UUP) has now been down for 10 of the last 11 days.
The price of oil was fairly flat yesterday by the close, but look where the pullback hit and held -- the 50-day moving average. This could be troublesome if it turns out to be a supported low. But as I pointed out yesterday, that does look like a head and shoulders pattern and it could just be in a right shoulder right now, which would tend to lead to a breakdown.
In recent months we showed a series of Hindenburg Omen Signals, and the Wyckoff Distribution pattern, both of which suggested a downswing was coming, and the midterm seasonality calendar suggested a potential sell off in March with a low at the end of March, but a rally to new highs into mid-to-late April. I'm sure none of us played it perfectly, but we had the info.
Should we take this chart seriously now - in the mid-to-late part of April? A friend of mine wants to know.
Additional TSP Fund Charts:
DWCPF (S-fund) didn't quite have the day that the S&P 500 had, mostly because the large cap indices were led by the large cap tech stocks. The index hit the February highs and held, and as I said the other day, this could be the area where we see a right shoulder of a bullish inverted head and shoulders form. Perhaps here, or maybe it tests the January highs first, but some kind of consolidation would not be a bad thing here.
ACWX (I-fund) actually closed down yesterday, perhaps because oil stopped going down, or because the I-fund was already up 8.6% in the first half of the month. Open gaps on both sides opens the door for some potential swings.
BND (bonds / F-fund) was down on higher yields but so far it has held the breakout above the wedge.
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.
