5/08/25
It was a complicated Fed FOMC meeting day, complete with no rate cut, unanswered questions, headlines from the White House, and dramatic volatility in the final few minutes of trading, and somehow the day ended with decent gains. Bonds were up again as yields slipped, and the dollar moved up holding the I-fund back yesterday.
I don't think we learned too much from the Fed meeting yesterday. Many of Chair Powell's responses to questions over the economy, inflation, and tariffs was, "We don't know." So while the market was gyrating and trying to figure out what to do with everything they just heard, a headline came out of the White House about rescinding the global chip rule restrictions that the Biden Administration had implemented, and we got a big pop, a drop, and then some head scratching into the close as investors didn't seem to know what to do.
Here's the intraday chart, and the blue dashed line was the prior day's close so we had a lot moves into and out of positive territory, and as late as 25-minutes before the closing bell the S&P 500 was down 10-points. About 5-minutes or so later, it was up more than 50-points. 5-minutes later it was nearly negative again, before settling somewhere in between the peak and break even.
The S&P 500 (C-fund) intraday chart up above is a lot more confusing and noisy than this daily chart which shows the index in a well contained area between the support from the 50-day EMA (purple) and the resistance from the 200-day EMA (blue). The 5500 area looks like a convenient place for a pullback to test, but the market doesn't make it that easy. I'm hearing a lot of bearish outlooks out there but the market feels like it wants to go higher. There have been plenty of catalysts over the last month that could have derailed the relief rally off the lows, but it's holding up. It may need a negative shakeout to get some newer bulls to bail again, but that would likely be a buying opportunity.
Yields were down most of the day and while the 10-Year Treasury Yield remains mostly in that comfortable range, between 4.1% and 4.4% for the last couple of months. We have seen some lower highs and a lower low recently so perhaps it is trying to trend lower.
The dollar (UUP) rallied yesterday and that 0.73% move higher is a significant one day move for the greenback and it keeps the inverted head and shoulders "bottom" pattern alive. The I-fund took the brunt of this rally in the dollar and it was down sharply on the day.
The market has survived the Fed meeting, the jobs report, Mag 7 earnings, and has recovered much of the losses from the tariff tantrum. There is a ton of uncertainty out there that is keeping a lot of money on the sidelines, and that could be the fuel that keeps stocks climbing the wall of worry.
DWCPF (S-fund) is holding above its 50-day average and now there is some rising support coming up quickly from below. If 2050 can't hold then 2000 would be in play and support below that looks suspect. So while this may need a brief pause after the big rally off the lows, support gets thin if this does fail at 2050.
ACWX (I-fund) was down sharply on a day where US stocks did well, and the strength in the dollar was a big reason. However, this chart has gone virtually straight up for the last four weeks and we can't expect that to continue forever. The question is whether filling the gap on a pullback will suffice, or does this chart need much more backing and filling to create a better base to create some support?
The BND (F-fund) rallied again so support is holding, but it has nearly filled in that small gap, which could be an area of resistance, and the top of the range isn't too far above that. Yields look to be trending lower, which would help here, but yields have also been in a range with no signs of breaking either way yet.
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
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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.
It was a complicated Fed FOMC meeting day, complete with no rate cut, unanswered questions, headlines from the White House, and dramatic volatility in the final few minutes of trading, and somehow the day ended with decent gains. Bonds were up again as yields slipped, and the dollar moved up holding the I-fund back yesterday.
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I don't think we learned too much from the Fed meeting yesterday. Many of Chair Powell's responses to questions over the economy, inflation, and tariffs was, "We don't know." So while the market was gyrating and trying to figure out what to do with everything they just heard, a headline came out of the White House about rescinding the global chip rule restrictions that the Biden Administration had implemented, and we got a big pop, a drop, and then some head scratching into the close as investors didn't seem to know what to do.
Here's the intraday chart, and the blue dashed line was the prior day's close so we had a lot moves into and out of positive territory, and as late as 25-minutes before the closing bell the S&P 500 was down 10-points. About 5-minutes or so later, it was up more than 50-points. 5-minutes later it was nearly negative again, before settling somewhere in between the peak and break even.
The S&P 500 (C-fund) intraday chart up above is a lot more confusing and noisy than this daily chart which shows the index in a well contained area between the support from the 50-day EMA (purple) and the resistance from the 200-day EMA (blue). The 5500 area looks like a convenient place for a pullback to test, but the market doesn't make it that easy. I'm hearing a lot of bearish outlooks out there but the market feels like it wants to go higher. There have been plenty of catalysts over the last month that could have derailed the relief rally off the lows, but it's holding up. It may need a negative shakeout to get some newer bulls to bail again, but that would likely be a buying opportunity.
Yields were down most of the day and while the 10-Year Treasury Yield remains mostly in that comfortable range, between 4.1% and 4.4% for the last couple of months. We have seen some lower highs and a lower low recently so perhaps it is trying to trend lower.
The dollar (UUP) rallied yesterday and that 0.73% move higher is a significant one day move for the greenback and it keeps the inverted head and shoulders "bottom" pattern alive. The I-fund took the brunt of this rally in the dollar and it was down sharply on the day.
The market has survived the Fed meeting, the jobs report, Mag 7 earnings, and has recovered much of the losses from the tariff tantrum. There is a ton of uncertainty out there that is keeping a lot of money on the sidelines, and that could be the fuel that keeps stocks climbing the wall of worry.
DWCPF (S-fund) is holding above its 50-day average and now there is some rising support coming up quickly from below. If 2050 can't hold then 2000 would be in play and support below that looks suspect. So while this may need a brief pause after the big rally off the lows, support gets thin if this does fail at 2050.
ACWX (I-fund) was down sharply on a day where US stocks did well, and the strength in the dollar was a big reason. However, this chart has gone virtually straight up for the last four weeks and we can't expect that to continue forever. The question is whether filling the gap on a pullback will suffice, or does this chart need much more backing and filling to create a better base to create some support?
The BND (F-fund) rallied again so support is holding, but it has nearly filled in that small gap, which could be an area of resistance, and the top of the range isn't too far above that. Yields look to be trending lower, which would help here, but yields have also been in a range with no signs of breaking either way yet.
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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