06/03/25
Stocks opened lower on Monday but it didn't take the dip buyers long to start nibbling, and by the close we saw most of the major stock indices in positive territory. The Dow erased a 400+ point early loss in the process of gaining 35-points on the day. The June seasonality calendar suggests there is a breeze at the backs of the bulls for a few days to start the new month. Yields were up pushing the F-fund lower, while the I-fund led with the dollar resuming its decline.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
It was a decent day for stocks yesterday with an assist from the tariff headlines as Trump is scheduled to talk with China's President Xi. That was just in time for the bullish early June seasonality calendar as the percentages are high for a few more positive days in this first week of the month, with one possible weak day, which has historically been on the 3rd or 4th of June. Seasonality is not a primary indicator, but it's there for consideration.
The rally came despite a warning from Defense Secretary Pete Hegseth this weekend that China is posing an imminent threat to Taiwan. He said, Beijing was "credibly preparing to potentially use military force to alter the balance of power" in Asia. Did the market dismiss it because they don't think it will happen, or because it wouldn't matter?
The 10-year Treasury Yield was up despite a slightly weaker than expected ISM Manufacturing report, but the Atlanta Fed just increased their second quarter GDP estimate up again; this time up to +4.6%, helping keep yields up. The yield had been pulling back for several days but it has now hit a double dose of support in the 4.4% area.
The dollar (UUP) fell sharply and I really have to rethink my theory about the dollar bottoming, as 27.2 may be the final line in the sand for that to occur.
The S&P 500 (C-fund) has been churning below 6000 for a couple of weeks but these formations are considered bullish cup and handle patterns, and they do tend to break to the upside, just like similar looking formations broke out earlier this month. They are large consolidation patterns (the cup) that fail at the previous high, then create a smaller consolidation, which is the handle.
Investor sentiment has been getting slightly more bullish but there is still skepticism in the air. Investors are usually the most bullish at market highs after a long bullish rally. Once the market starts to fail, sentiment declines until we start seeing more bears than bulls. During that period the market tends to find support and eventually rally like we saw in April, climbing the wall of worry as more and more bearish investors turn bullish until most people are bullish again, and the cycle repeats.
Right now there are still more bears than bulls (0.79 to 1 bulls / bears ratio) so we seem to be in the beginning of the skepticism phase as the market climbs that wall of worry so there could be more time for it to move up before we start see the ratio of bulls to bears get back over a 2.0 to 1 ratio again until that eventually gets exhausted. And that could take months or years, although it's almost never a straight line higher.
The May TSP Talk AutoTracker winners have been posted in the forum. Congratulations to REAPER for being the top return for the month at +8.88%, and the other top 5 finishers who had gains of +7.66% to +8.36%! Great job! This is why we do this. Get in on the action - it's free!
How are you doing? You can follow the transactions of these monthly, and the annual leaders, by subscribing to the Last Look Report. Click here for more information.
The DWCPF (S-fund) continues to consolidate above the major moving averages and the now the March peak. This is a healthy move after the run up from 1750 to 2200+ in recent weeks. The left shoulder of this current inverted head and shoulders pattern took about three weeks to form, and the right shoulder is now also three weeks old. They don't have to be equal in size, but the shoulder is certainly big enough to be considered fully formed now.
ACWX (I-fund) made new highs again as that weak dollar continues to provide assistance. It looks a little scary to me with little support below, but it is working.
BND (bonds / F-fund) pulled back with yields moving up on stronger economic data. It did find support at the 50-day EMA after breaking out above that blue trading channel last week.
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.
Stocks opened lower on Monday but it didn't take the dip buyers long to start nibbling, and by the close we saw most of the major stock indices in positive territory. The Dow erased a 400+ point early loss in the process of gaining 35-points on the day. The June seasonality calendar suggests there is a breeze at the backs of the bulls for a few days to start the new month. Yields were up pushing the F-fund lower, while the I-fund led with the dollar resuming its decline.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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It was a decent day for stocks yesterday with an assist from the tariff headlines as Trump is scheduled to talk with China's President Xi. That was just in time for the bullish early June seasonality calendar as the percentages are high for a few more positive days in this first week of the month, with one possible weak day, which has historically been on the 3rd or 4th of June. Seasonality is not a primary indicator, but it's there for consideration.
The rally came despite a warning from Defense Secretary Pete Hegseth this weekend that China is posing an imminent threat to Taiwan. He said, Beijing was "credibly preparing to potentially use military force to alter the balance of power" in Asia. Did the market dismiss it because they don't think it will happen, or because it wouldn't matter?
The 10-year Treasury Yield was up despite a slightly weaker than expected ISM Manufacturing report, but the Atlanta Fed just increased their second quarter GDP estimate up again; this time up to +4.6%, helping keep yields up. The yield had been pulling back for several days but it has now hit a double dose of support in the 4.4% area.
The dollar (UUP) fell sharply and I really have to rethink my theory about the dollar bottoming, as 27.2 may be the final line in the sand for that to occur.
The S&P 500 (C-fund) has been churning below 6000 for a couple of weeks but these formations are considered bullish cup and handle patterns, and they do tend to break to the upside, just like similar looking formations broke out earlier this month. They are large consolidation patterns (the cup) that fail at the previous high, then create a smaller consolidation, which is the handle.
Investor sentiment has been getting slightly more bullish but there is still skepticism in the air. Investors are usually the most bullish at market highs after a long bullish rally. Once the market starts to fail, sentiment declines until we start seeing more bears than bulls. During that period the market tends to find support and eventually rally like we saw in April, climbing the wall of worry as more and more bearish investors turn bullish until most people are bullish again, and the cycle repeats.
Right now there are still more bears than bulls (0.79 to 1 bulls / bears ratio) so we seem to be in the beginning of the skepticism phase as the market climbs that wall of worry so there could be more time for it to move up before we start see the ratio of bulls to bears get back over a 2.0 to 1 ratio again until that eventually gets exhausted. And that could take months or years, although it's almost never a straight line higher.
The May TSP Talk AutoTracker winners have been posted in the forum. Congratulations to REAPER for being the top return for the month at +8.88%, and the other top 5 finishers who had gains of +7.66% to +8.36%! Great job! This is why we do this. Get in on the action - it's free!
How are you doing? You can follow the transactions of these monthly, and the annual leaders, by subscribing to the Last Look Report. Click here for more information.
The DWCPF (S-fund) continues to consolidate above the major moving averages and the now the March peak. This is a healthy move after the run up from 1750 to 2200+ in recent weeks. The left shoulder of this current inverted head and shoulders pattern took about three weeks to form, and the right shoulder is now also three weeks old. They don't have to be equal in size, but the shoulder is certainly big enough to be considered fully formed now.
ACWX (I-fund) made new highs again as that weak dollar continues to provide assistance. It looks a little scary to me with little support below, but it is working.
BND (bonds / F-fund) pulled back with yields moving up on stronger economic data. It did find support at the 50-day EMA after breaking out above that blue trading channel last week.
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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