May 14, 2025
Stocks continued to rally on Tuesday and a favorable CPI data inflation report helped. The Dow was down sharply but it was an 18% loss in UnitedHealth Group that was responsible for 400-points off the Dow. The S&P 500 turned positive for the year with its 0.72% gain, and the I-fund lagged again despite a pullback in the dollar.
The S&P 500 (C-fund) gained a healthy 0.72%, although that was off the 1% plus gain it had at yesterday's highs. Late selling kicked in and we can see that it is hitting the top of a rising trading channel. The next resistance levels are near the March 3 breakdown candlestick high, and then the prior all time highs. There's still a bit of room before it gets there, but it has been a quick recovery.
This chart below shows the only other 20% decline in the S&P 500 that recovered faster. It started at the lows in December of 2018 when the Fed pivoted to a more dovish monetary policy, and stocks went virtually straight up from there. For the patient back then who were waiting for a decline to buy, rather than chase the rally, they had to wait a couple of months before there was a meaningful pullback. Otherwise, any 2 - 3 day dip had to be bought to get onboard.
I don't know if that will be the case this time as well, but that does make a case for chasing, something I usually do not like to do. The sharp pullback that occurred in May of 2019 that started over 4 months after the lows, erased the gains from February through April, so it may have been worth the wait, but if you were quick, some of the smaller dips were playable.
The 10-Year Treasury Yield was up and closed at a 3-month high. It's been quite the debate explaining this move. Is it a sign of inflation, or economic growth? The CPI suggested inflation is under control and with tariffs lower than initially feared, inflation may continue to stabilize or move lower than previously expected, yet the savvy bond market is still selling bonds and making yields move higher. As always, I am more concerned with the speed of any change in yields and the two week move from 4.1% to 4.5% may not be too concerning, but it is moving a little quick. Perhaps the bond market is reprising in the tariff's lesser impact on economic growth? Just a guess.
The dollar was doing some backing and filling of the gap it had opened on Monday, but it did stall at the 50 and 200-day averages.
I'm an investor, or more so a swing trader, of bitcoin ETFs but I have also use bitcoin to determine if investors are approaching the stock market with a risk on, or risk off environment. While they both tend to move in a similar direction, it looks like bitcoin tends to stall before the S&P 500, by weeks to months.
Right now both are heading up but bitcoin is closing in a test of its all-time highs so a double top watch will be on. If bitcoin does pullback at a double top, that could mean the S&P's pullback could be a few weeks behind.
Tomorrow we get the PPI (Producer price Index) report. Let's see if the favorable CPI will be rubbing off on tomorrow's PPI data.
DWCPF (S-fund) is nearing more resistance, but it has attacked previous resistance with little consequence. At some point, maybe soon, the sentiment will get too bullish to keep stocks going, but right now there seems to be enough skepticism in the rally out there to keep it going.
ACWX (I-fund) lagged again yesterday even though the dollar helped it with a big decline. The TSP may have owned the I-fund some fair value from Monday's price.
The decline in the dollar (UUP) is possibly temporary as it fills in Monday's open gap, but there is a little more of the gap to fill.
The BND (F-fund) was down slightly and higher yields, possibly due to higher GDP forecasts, is a good sign for stocks, but maybe not the bond market, although this does remain in a range and buying near the bottom of the range has paid off in recent months.
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 may use additional methods and strategies to determine fund positions.
Stocks continued to rally on Tuesday and a favorable CPI data inflation report helped. The Dow was down sharply but it was an 18% loss in UnitedHealth Group that was responsible for 400-points off the Dow. The S&P 500 turned positive for the year with its 0.72% gain, and the I-fund lagged again despite a pullback in the dollar.
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The S&P 500 (C-fund) gained a healthy 0.72%, although that was off the 1% plus gain it had at yesterday's highs. Late selling kicked in and we can see that it is hitting the top of a rising trading channel. The next resistance levels are near the March 3 breakdown candlestick high, and then the prior all time highs. There's still a bit of room before it gets there, but it has been a quick recovery.
This chart below shows the only other 20% decline in the S&P 500 that recovered faster. It started at the lows in December of 2018 when the Fed pivoted to a more dovish monetary policy, and stocks went virtually straight up from there. For the patient back then who were waiting for a decline to buy, rather than chase the rally, they had to wait a couple of months before there was a meaningful pullback. Otherwise, any 2 - 3 day dip had to be bought to get onboard.
I don't know if that will be the case this time as well, but that does make a case for chasing, something I usually do not like to do. The sharp pullback that occurred in May of 2019 that started over 4 months after the lows, erased the gains from February through April, so it may have been worth the wait, but if you were quick, some of the smaller dips were playable.
The 10-Year Treasury Yield was up and closed at a 3-month high. It's been quite the debate explaining this move. Is it a sign of inflation, or economic growth? The CPI suggested inflation is under control and with tariffs lower than initially feared, inflation may continue to stabilize or move lower than previously expected, yet the savvy bond market is still selling bonds and making yields move higher. As always, I am more concerned with the speed of any change in yields and the two week move from 4.1% to 4.5% may not be too concerning, but it is moving a little quick. Perhaps the bond market is reprising in the tariff's lesser impact on economic growth? Just a guess.
The dollar was doing some backing and filling of the gap it had opened on Monday, but it did stall at the 50 and 200-day averages.
I'm an investor, or more so a swing trader, of bitcoin ETFs but I have also use bitcoin to determine if investors are approaching the stock market with a risk on, or risk off environment. While they both tend to move in a similar direction, it looks like bitcoin tends to stall before the S&P 500, by weeks to months.
Right now both are heading up but bitcoin is closing in a test of its all-time highs so a double top watch will be on. If bitcoin does pullback at a double top, that could mean the S&P's pullback could be a few weeks behind.
Tomorrow we get the PPI (Producer price Index) report. Let's see if the favorable CPI will be rubbing off on tomorrow's PPI data.
DWCPF (S-fund) is nearing more resistance, but it has attacked previous resistance with little consequence. At some point, maybe soon, the sentiment will get too bullish to keep stocks going, but right now there seems to be enough skepticism in the rally out there to keep it going.
ACWX (I-fund) lagged again yesterday even though the dollar helped it with a big decline. The TSP may have owned the I-fund some fair value from Monday's price.
The decline in the dollar (UUP) is possibly temporary as it fills in Monday's open gap, but there is a little more of the gap to fill.
The BND (F-fund) was down slightly and higher yields, possibly due to higher GDP forecasts, is a good sign for stocks, but maybe not the bond market, although this does remain in a range and buying near the bottom of the range has paid off in recent months.
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 may use additional methods and strategies to determine fund positions.
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