03/06/26
Higher highs in the price of oil, and yields rallying on stronger than expected employment data, are igniting some inflation concerns again. The bulls and bears continue their battle and yesterday the bears won, but the bulls put up a late fight taking the charts well off their lows and back above support in some cases. The dollar rallied again giving the I-fund more trouble.
The price of oil jumped another 6% yesterday and that made a new high, and the higher this goes, so goes the threat of inflation. Of course this is all related to the turmoil in the Middle East, and depending on how much of the oil supply gets cut off, lower supply is trumping demand.
Higher yields are suggesting that the bond market may be getting concerned about inflation as well, because typically bonds would be rallying as a safety trade (bonds move counter to yields) if investors are worried about the stock market. Instead bonds are falling and yields are rallying. Today's jobs report could change everything - or confirm what has been happening.
We saw the S&P 500 (C-fund) catch a bid at about 3 pm ET on Thursday, just as oil and the dollar started to rollover. It's the new catalyst and likely being driven by algorithm trading at this point.
The S&P 500 (C-fund) was down about 100-points at the lows on Thursday, but it found support - this time at the bottom of the blue bullish looking flag, rebounded and closed down "just" 39-points. That put it back above that key purple 86-day moving average. Why the 86-day? Because it is working right now, and that's a good enough reason.
The chart shows some potential, but we're still at 7 Hindenburg Omen Signals, and the Wyckoff Distribution pattern is still in play.
The Transportation Index took a big hit yesterday and closed below its 20-day average for the first time since November. That's new and a new warning. The 50-day average is not too much further down and if not for what is happening to the price of oil, I would think the 50-day average would hold easily on the first try. But because trucking and delivery companies may be calculating the impact of higher gas prices on their bottom line, this may find some trouble if oil keeps rising.
Financials continues to slide lower as the previous rally came up short when it hit resistance last week. The message here is that bull markets usually need the financials to come along for the ride.
I mentioned bitcoin in Thursday's commentary after a $5000 point rally on Wednesday where stocks moved up along with it. On Thursday it pulled back down, failing to follow through after hitting the 50-day average and the top of what looks like a bear flag. Does this to get over 75,000 before the S&P 500 is going to move to new highs? Very possibly.
The S&P 500 is still only about 2% or so off its all time highs and perhaps because of the geopolitical events, it feels much worse than that. Watch for clues and the mainstream media is not where you want to get those clues. The charts will usually tell the more accurate [stock market] story.
We will get the February Jobs Report this morning (Friday.) Estimates are looking for a gain of about 60,000 70,000 jobs and an unemployment rate of 4.3%.
Additional TSP Fund Charts:
DWCPF (S-fund) either looks great or terrible each day as the swings have become quite wide. The blue neckline of the head and shoulders pattern held as support yesterday, but it did close below that purple average for just the second time since November. It needs to bounce here.
ACWX (I-fund) put up another crooked number loss yesterday, but with the TSP short changing the price on Wednesday, it had to make a positive adjustment for Thursday's price so the I-fund was only given a 0.90% loss yesterday.
BND (bonds / F-fund) broke lower and is back in the channel and nearing the purple 50-day average, which has done a pretty good job of holding for the last several months.
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 use additional methods and strategies to determine fund positions.
Higher highs in the price of oil, and yields rallying on stronger than expected employment data, are igniting some inflation concerns again. The bulls and bears continue their battle and yesterday the bears won, but the bulls put up a late fight taking the charts well off their lows and back above support in some cases. The dollar rallied again giving the I-fund more trouble.
| Daily TSP Funds Return More returns |
The price of oil jumped another 6% yesterday and that made a new high, and the higher this goes, so goes the threat of inflation. Of course this is all related to the turmoil in the Middle East, and depending on how much of the oil supply gets cut off, lower supply is trumping demand.
Higher yields are suggesting that the bond market may be getting concerned about inflation as well, because typically bonds would be rallying as a safety trade (bonds move counter to yields) if investors are worried about the stock market. Instead bonds are falling and yields are rallying. Today's jobs report could change everything - or confirm what has been happening.
We saw the S&P 500 (C-fund) catch a bid at about 3 pm ET on Thursday, just as oil and the dollar started to rollover. It's the new catalyst and likely being driven by algorithm trading at this point.
The S&P 500 (C-fund) was down about 100-points at the lows on Thursday, but it found support - this time at the bottom of the blue bullish looking flag, rebounded and closed down "just" 39-points. That put it back above that key purple 86-day moving average. Why the 86-day? Because it is working right now, and that's a good enough reason.
The chart shows some potential, but we're still at 7 Hindenburg Omen Signals, and the Wyckoff Distribution pattern is still in play.
The Transportation Index took a big hit yesterday and closed below its 20-day average for the first time since November. That's new and a new warning. The 50-day average is not too much further down and if not for what is happening to the price of oil, I would think the 50-day average would hold easily on the first try. But because trucking and delivery companies may be calculating the impact of higher gas prices on their bottom line, this may find some trouble if oil keeps rising.
Financials continues to slide lower as the previous rally came up short when it hit resistance last week. The message here is that bull markets usually need the financials to come along for the ride.
I mentioned bitcoin in Thursday's commentary after a $5000 point rally on Wednesday where stocks moved up along with it. On Thursday it pulled back down, failing to follow through after hitting the 50-day average and the top of what looks like a bear flag. Does this to get over 75,000 before the S&P 500 is going to move to new highs? Very possibly.
The S&P 500 is still only about 2% or so off its all time highs and perhaps because of the geopolitical events, it feels much worse than that. Watch for clues and the mainstream media is not where you want to get those clues. The charts will usually tell the more accurate [stock market] story.
We will get the February Jobs Report this morning (Friday.) Estimates are looking for a gain of about 60,000 70,000 jobs and an unemployment rate of 4.3%.
Additional TSP Fund Charts:
DWCPF (S-fund) either looks great or terrible each day as the swings have become quite wide. The blue neckline of the head and shoulders pattern held as support yesterday, but it did close below that purple average for just the second time since November. It needs to bounce here.
ACWX (I-fund) put up another crooked number loss yesterday, but with the TSP short changing the price on Wednesday, it had to make a positive adjustment for Thursday's price so the I-fund was only given a 0.90% loss yesterday.
BND (bonds / F-fund) broke lower and is back in the channel and nearing the purple 50-day average, which has done a pretty good job of holding for the last several months.
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 use additional methods and strategies to determine fund positions.
