04/07/26
Stocks opened modestly higher on Monday and did not move much as the indices remained slightly higher most of the day and into the close. The indices are holding below or near some tough resistance levels, but so far there was no sign of a post-holiday reversal of last week's pre-holiday gains. However, there's a big deadline coming up that could change everything.
We're at critical point where President Trump gave Iran another ultimatum to either make a deal or face swift, and massive infrastructure destruction, and the deadline is Tuesday night at 8PM. Trump has been around long enough that, if you are surprised by his negotiation tactics, that's on you and you may be leaning the wrong way. That is how the term TACO came about (Trump Always Chickens Out) but we've known those tactics for years and it's wash, rinse, and repeat. Love him, or hate him, we can use it to our advantage, or act surprised when he does it again. If he's looking to make $5 he may ask for $10 and then we see where it goes from there.
So, whether Iran believes he is bluffing and ignores the threat of massive destruction, or alternatively agrees to a ceasefire and Iran reopens the Strait of Hormuz, the cards are on the table and we'll have to see how the hand gets played.
I don't know if it will be that cut and dried, and we don't know what Iran's response will be, but the charts are at a point that makes sense. It's do or die time and the charts could go either way from here, as you'll see. If Iran declines the offer, it will be back on President Trump to follow through or TACO it again.
The SPY (S&P 500 ETF / C-fund) remains near a pivot point just below the 200-day moving average, and it could fail here or gap up, depending on Iran's response. That chart doesn't seem to lean one way or the other, although this is typically where a bear market rally would have trouble. The very light trading volume makes yesterday's rally somewhat unimpressive, but investors seem to be as uncertain as the chart suggests.
Oil is still the catalyst but it starts with the deal. The price could drop $10, $20, or $30 very quickly if some kind of deal is made. Otherwise, buckle up.
The 10-year Treasury Yield was up modesty after Friday strong jobs report, and it is also sensitive the price of oil. Higher oil prices potentially leads to inflation, and yields tend to go up with inflation concerns.
We're seeing some decent action from the leaders, but there is still resistance to deal with a little higher up.
The Dow Transportation Index bottomed on March 13, despite the rally in oil, and has been performing quite well.
The small caps of the Russell 2000 may have put in a double bottom near the 200-day moving average, which it only closed below once. But it is now testing the resistance of the 50-day EMA.
And the long-term weekly chart of the Russell 2000 looks interesting as well as the breakout levels got retested and so far have held.
That's a pretty good looking chart for the small caps, but in the short-term, there could always be a geopolitical jolt.
Additional TSP Fund Charts:
DWCPF (S-fund) posted a decent gain yesterday as it closed above the 200-day moving average for a second straight day. That's good, but there's plenty of resistance just above 2500. It has been churning between 2425 and 2500 for weeks. Remember, the initial downside target of the head and shoulders breakdown was about 2375 and that was hit. That doesn't have to be the low, but it could be.
ACWX (I-fund) has been bouncing back, and after breaking above the descending trading channel during the pre-holiday trading, the ACWX was able to keep it going, closing above resistance for a third straight day. There's a large open gap above and it could technically be filled at 72.50, or as high as 73.20, which was the closing price on March 2nd.
BND (bonds / F-fund) was down with yields moving up on the jobs data last Friday. It pulled back from the 50-day average and is back below the wedge formation. This would be a place that it could fail, and I believe this will go in the opposite direction of the price of oil. If a war deal is made, it will move up, otherwise the resistance could continue to hold.
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 use additional methods and strategies to determine fund positions.
Stocks opened modestly higher on Monday and did not move much as the indices remained slightly higher most of the day and into the close. The indices are holding below or near some tough resistance levels, but so far there was no sign of a post-holiday reversal of last week's pre-holiday gains. However, there's a big deadline coming up that could change everything.
| Daily TSP Funds Return More returns |
We're at critical point where President Trump gave Iran another ultimatum to either make a deal or face swift, and massive infrastructure destruction, and the deadline is Tuesday night at 8PM. Trump has been around long enough that, if you are surprised by his negotiation tactics, that's on you and you may be leaning the wrong way. That is how the term TACO came about (Trump Always Chickens Out) but we've known those tactics for years and it's wash, rinse, and repeat. Love him, or hate him, we can use it to our advantage, or act surprised when he does it again. If he's looking to make $5 he may ask for $10 and then we see where it goes from there.
So, whether Iran believes he is bluffing and ignores the threat of massive destruction, or alternatively agrees to a ceasefire and Iran reopens the Strait of Hormuz, the cards are on the table and we'll have to see how the hand gets played.
I don't know if it will be that cut and dried, and we don't know what Iran's response will be, but the charts are at a point that makes sense. It's do or die time and the charts could go either way from here, as you'll see. If Iran declines the offer, it will be back on President Trump to follow through or TACO it again.
The SPY (S&P 500 ETF / C-fund) remains near a pivot point just below the 200-day moving average, and it could fail here or gap up, depending on Iran's response. That chart doesn't seem to lean one way or the other, although this is typically where a bear market rally would have trouble. The very light trading volume makes yesterday's rally somewhat unimpressive, but investors seem to be as uncertain as the chart suggests.
Oil is still the catalyst but it starts with the deal. The price could drop $10, $20, or $30 very quickly if some kind of deal is made. Otherwise, buckle up.
The 10-year Treasury Yield was up modesty after Friday strong jobs report, and it is also sensitive the price of oil. Higher oil prices potentially leads to inflation, and yields tend to go up with inflation concerns.
We're seeing some decent action from the leaders, but there is still resistance to deal with a little higher up.
The Dow Transportation Index bottomed on March 13, despite the rally in oil, and has been performing quite well.
The small caps of the Russell 2000 may have put in a double bottom near the 200-day moving average, which it only closed below once. But it is now testing the resistance of the 50-day EMA.
And the long-term weekly chart of the Russell 2000 looks interesting as well as the breakout levels got retested and so far have held.
That's a pretty good looking chart for the small caps, but in the short-term, there could always be a geopolitical jolt.
Additional TSP Fund Charts:
DWCPF (S-fund) posted a decent gain yesterday as it closed above the 200-day moving average for a second straight day. That's good, but there's plenty of resistance just above 2500. It has been churning between 2425 and 2500 for weeks. Remember, the initial downside target of the head and shoulders breakdown was about 2375 and that was hit. That doesn't have to be the low, but it could be.
ACWX (I-fund) has been bouncing back, and after breaking above the descending trading channel during the pre-holiday trading, the ACWX was able to keep it going, closing above resistance for a third straight day. There's a large open gap above and it could technically be filled at 72.50, or as high as 73.20, which was the closing price on March 2nd.
BND (bonds / F-fund) was down with yields moving up on the jobs data last Friday. It pulled back from the 50-day average and is back below the wedge formation. This would be a place that it could fail, and I believe this will go in the opposite direction of the price of oil. If a war deal is made, it will move up, otherwise the resistance could continue to hold.
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.
