11/19/25
No rebound or Turnaround Tuesday for stocks yesterday as the pullback continued. We saw a little life in the small caps, but nothing cementing in a low yet, and some indices are testing another line in the sand. Bonds were up a bit with yields moving down slightly, and the minor rally in the dollar pushed the I-fund chart below support.
With small caps stabilizing for a day, we look toward the large caps, and Nvidia, one of the largest of the large reports earnings today after the closing bell, and that may be why we have not seen any conviction from the bulls yet. As I said yesterday, this could put another nail in the coffin of the AI trade, or it could finally give the bulls a reason to get back onboard.
The stock is floundering with the rest of the market as it tests levels we saw as early as late July. Yesterday's 2.8% loss pushed it below that red rising support line, but it does remain in a congested area where the bulls will look for support, and the bears will be looking for a breakdown.
As for the other six Magnificent 7 stocks, they are mixed with Alphabet (GOOG) and Apple close to their all-time highs, while the others are struggling to varying degrees.
Of course those stocks are all in the S&P 500 (C-fund) and that index is testing the bottom of the range it has been in for the last two months. Yesterday's low was a 5% decline from the October highs, and that was the first 5% pullback since the April lows, so if that was what the market and investors were looking for, it has been accomplished.
I had been mentioning the negative divergence in the PMO indicator for months now, and I was surprised how long that was going on without much of a consequence. It seems we got that consequence, but I certainly got lured into complacency after a couple of months of seeing this.
JTH in our forum (follow his blog here) wrote about 2007 comparisons yesterday and I see quite a few as well. Here are some observations between today and back then.
Notice the negative divergence in the PMO indicator from October 2006 until the peak in early 2007. Again, it was easy to be lulled to sleep. But the bull market didn't end there. There were a few more pushes to new highs before the ultimate peak in October of 2007, which led to the bear market that did not bottom until March of 2009 when the S&P 500 eventually fell to 666. Ouch!
I am not saying that is what is going to happen here, but what could happen - both on the bullish side, where we could continue to see more new highs before this bull market eventually ends. Or on the bearish side where this current action could be setting up the next bear market, whether it started already, or it peaks several months from now as it did in 2007 after that first warning from the PMO in late 2006.
The FOMC Meeting Minutes will be released toady. We are scheduled to get a jobs report on Thursday morning which I believe will be the delayed September data, because of the shutdown. And on Friday there will be a series of speeches from Fed officials that could impact the markets.
The DWCPF Index (S-Fund) showed a little life yesterday, but nothing impressive yet. It's close to testing its 200-day EMA, which could be a make or break area for the direction of the next 5% to 10% move.
ACWX (I-fund) took a hit but more important than the near 1% loss was the breakdown in the chart. Japan's Nikkei really struggling lately and becoming a drag on the I-fund.
BND (bonds / F-fund) was up slightly but all eyes are on this week's economic data and what the Federal Reserve has to say. The chart looks bearish but if that 50-day average can continue to hold, the bulls may try to push it higher.
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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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.
No rebound or Turnaround Tuesday for stocks yesterday as the pullback continued. We saw a little life in the small caps, but nothing cementing in a low yet, and some indices are testing another line in the sand. Bonds were up a bit with yields moving down slightly, and the minor rally in the dollar pushed the I-fund chart below support.
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With small caps stabilizing for a day, we look toward the large caps, and Nvidia, one of the largest of the large reports earnings today after the closing bell, and that may be why we have not seen any conviction from the bulls yet. As I said yesterday, this could put another nail in the coffin of the AI trade, or it could finally give the bulls a reason to get back onboard.
The stock is floundering with the rest of the market as it tests levels we saw as early as late July. Yesterday's 2.8% loss pushed it below that red rising support line, but it does remain in a congested area where the bulls will look for support, and the bears will be looking for a breakdown.
As for the other six Magnificent 7 stocks, they are mixed with Alphabet (GOOG) and Apple close to their all-time highs, while the others are struggling to varying degrees.
Of course those stocks are all in the S&P 500 (C-fund) and that index is testing the bottom of the range it has been in for the last two months. Yesterday's low was a 5% decline from the October highs, and that was the first 5% pullback since the April lows, so if that was what the market and investors were looking for, it has been accomplished.
I had been mentioning the negative divergence in the PMO indicator for months now, and I was surprised how long that was going on without much of a consequence. It seems we got that consequence, but I certainly got lured into complacency after a couple of months of seeing this.
JTH in our forum (follow his blog here) wrote about 2007 comparisons yesterday and I see quite a few as well. Here are some observations between today and back then.
Notice the negative divergence in the PMO indicator from October 2006 until the peak in early 2007. Again, it was easy to be lulled to sleep. But the bull market didn't end there. There were a few more pushes to new highs before the ultimate peak in October of 2007, which led to the bear market that did not bottom until March of 2009 when the S&P 500 eventually fell to 666. Ouch!
I am not saying that is what is going to happen here, but what could happen - both on the bullish side, where we could continue to see more new highs before this bull market eventually ends. Or on the bearish side where this current action could be setting up the next bear market, whether it started already, or it peaks several months from now as it did in 2007 after that first warning from the PMO in late 2006.
The FOMC Meeting Minutes will be released toady. We are scheduled to get a jobs report on Thursday morning which I believe will be the delayed September data, because of the shutdown. And on Friday there will be a series of speeches from Fed officials that could impact the markets.
The DWCPF Index (S-Fund) showed a little life yesterday, but nothing impressive yet. It's close to testing its 200-day EMA, which could be a make or break area for the direction of the next 5% to 10% move.
ACWX (I-fund) took a hit but more important than the near 1% loss was the breakdown in the chart. Japan's Nikkei really struggling lately and becoming a drag on the I-fund.
BND (bonds / F-fund) was up slightly but all eyes are on this week's economic data and what the Federal Reserve has to say. The chart looks bearish but if that 50-day average can continue to hold, the bulls may try to push it higher.
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.
