02/19/26
It was a positive but choppy day of trading yesterday as a strong morning rally faded after the release of the minutes from the Fed's recent meeting. The minutes showed them being more hawkish than expected and, along with better than expected housing data, bond yields moved up sending bonds and the F-fund lower. Stocks fell on the Fed news initially, but tried to rally back late.
The S&P 500 never did go negative yesterday as it opened higher following the strong housing data, but we still saw a lot of back and forth, thanks to those Fed minutes released in the afternoon. We also did not see a 1.0% trading range for the first time in several days, but it was a 0.86% range, and the bulls were in control.
The S&P 500 (C-fund) chart made some headway when it jumped back above the bottom of the blue ascending trading channel and the 50-day EMA, but there is still more resistance overhead, with the 6935 area probably the biggest test, and then 6980. The index has been in a narrow range for a couple of months, and Mike Santoli on CNBC asked the perfect question: Is this sideways action resilience or exhaustion?
The PMO momentum indicator is still moving downward, and this would be a bigger concern if it hasn't been giving us a negative divergence since it peaked last May. One day it will matter, but we could have missed one heck of a rally listening to this bearish indicator.
The 10-Year Treasury Yield had all but filled in that open gap before reversing on back up Tuesday and rallying again on Wednesday, mostly caused by the stronger than expected Housing data, but the chart was hinting that a reversal might be coming.
This, of course sent BND (bonds / F-fund) down yesterday as it tried to fill in one of its gaps after the sharp breakout rally started about a week ago.
The Dow Transportation Index had another big day as it reached toward the recent highs after completing a quick pullback. This index is economically sensitive as it tends to be the first sector to notice shifts in the economy.
The small caps of the Russell 2000 (not our S-fund) has been holding up firmly at the 50-day average, but it now faces some strong resistance where an old resistance line meets broken support. This is the kind of situation that can bring a gap up kind of day, although that usually needs a meaningful catalyst, or a pullback from the resistance.
What could the catalysts be? Maybe the PCE Pricing inflation data, which comes out on Friday. Or, an attack on Iran is potentially in the cards. The price of oil has been moving up on that concern. And Nvidia reports earnings next week.
Additional TSP Fund Charts:
The DWCPF (S-fund) came out of a bullish inverted head and shoulders pattern in early January, but since then we may be watching a more bearish head and shoulders pattern forming. There is some resistance coming off the recent highs, but that type of resistance isn't usually overly stubborn. The 50-day average, and then the red horizontal line, are key support areas that must hold.
The ACWX (I fund) was up modestly despite a big rally in the dollar yesterday, and that's a sign of relative strength. The trend is our friend, but if the channel breaks, there's a lot of room for a pullback.
The dollar (UUP) rallied strongly and if that 27.10 area can get taken out, it may make a move toward the open gap near 27.40.
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.
It was a positive but choppy day of trading yesterday as a strong morning rally faded after the release of the minutes from the Fed's recent meeting. The minutes showed them being more hawkish than expected and, along with better than expected housing data, bond yields moved up sending bonds and the F-fund lower. Stocks fell on the Fed news initially, but tried to rally back late.
| Daily TSP Funds Return
More returns |
The S&P 500 never did go negative yesterday as it opened higher following the strong housing data, but we still saw a lot of back and forth, thanks to those Fed minutes released in the afternoon. We also did not see a 1.0% trading range for the first time in several days, but it was a 0.86% range, and the bulls were in control.
The S&P 500 (C-fund) chart made some headway when it jumped back above the bottom of the blue ascending trading channel and the 50-day EMA, but there is still more resistance overhead, with the 6935 area probably the biggest test, and then 6980. The index has been in a narrow range for a couple of months, and Mike Santoli on CNBC asked the perfect question: Is this sideways action resilience or exhaustion?
The PMO momentum indicator is still moving downward, and this would be a bigger concern if it hasn't been giving us a negative divergence since it peaked last May. One day it will matter, but we could have missed one heck of a rally listening to this bearish indicator.
The 10-Year Treasury Yield had all but filled in that open gap before reversing on back up Tuesday and rallying again on Wednesday, mostly caused by the stronger than expected Housing data, but the chart was hinting that a reversal might be coming.
This, of course sent BND (bonds / F-fund) down yesterday as it tried to fill in one of its gaps after the sharp breakout rally started about a week ago.
The Dow Transportation Index had another big day as it reached toward the recent highs after completing a quick pullback. This index is economically sensitive as it tends to be the first sector to notice shifts in the economy.
The small caps of the Russell 2000 (not our S-fund) has been holding up firmly at the 50-day average, but it now faces some strong resistance where an old resistance line meets broken support. This is the kind of situation that can bring a gap up kind of day, although that usually needs a meaningful catalyst, or a pullback from the resistance.
What could the catalysts be? Maybe the PCE Pricing inflation data, which comes out on Friday. Or, an attack on Iran is potentially in the cards. The price of oil has been moving up on that concern. And Nvidia reports earnings next week.
Additional TSP Fund Charts:
The DWCPF (S-fund) came out of a bullish inverted head and shoulders pattern in early January, but since then we may be watching a more bearish head and shoulders pattern forming. There is some resistance coming off the recent highs, but that type of resistance isn't usually overly stubborn. The 50-day average, and then the red horizontal line, are key support areas that must hold.
The ACWX (I fund) was up modestly despite a big rally in the dollar yesterday, and that's a sign of relative strength. The trend is our friend, but if the channel breaks, there's a lot of room for a pullback.
The dollar (UUP) rallied strongly and if that 27.10 area can get taken out, it may make a move toward the open gap near 27.40.
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.
