10/15/25
Stocks opened sharply lower yesterday and Friday's lows, which I harped on in yesterday's commentary, was quickly retested and held like a champ. Technically we could still call that a "V" bottom since the lows were so close together, but it was a successful test and whether it needs another test remains to be seen. For now, the emphatic test and reversal back up was very impressive and convincing.
Remember, because of the holiday on Monday, the daily TSP Fund returns below represent the market action from both Monday and Tuesday combined.
Nvidia, the largest weighted stock in the S&P 500 and Nasdaq, was down 4.4% yesterday and that helped cloak a very strong day for the stock market yesterday. Nvidia is not in the Dow or the small cap indices and they did well.
You can see how lopsided the advancing issues and trading volume was compared to the declining, but because Nvidia was down so heavily, and to a lesser degree the 2nd thru sixth highest weighted stocks in the Nasdaq were also down, the Nasdaq Index was down sharply on the day, and it took the S&P 500 down some with it.
The broader market did very well, and you can see that in our S-fund, the DWCPF Index, which is basically every stock in the US stock market sans the S&P 500 companies. It had an amazing day and the positive outside reversal day tells us something very good is happening. Not that it can't go back and retrace some of that large positive candlestick, but the recent lows look very firm for now.
Lower interest rates are coming and that's one reason why the small caps may finally be ready to play catch up. Bond yields are also moving lower and we see the 10-Year Treasury Yield flirting with its recent lows. It closed at 4.02% yesterday and it hasn't closed below 4.0% since the bottom of the Tariff Tantrum in stocks back in April.
I've been a little obsessed with the dollar in recent months (if you haven't noticed) and the outlook for the dollar on Wall Street seems to have been very bearish, which of course means it tends to do the opposite, and that's what we've seen for the last month or more - a big rally in the dollar.
In reality, the dollar is trying to hold at long-term support and it is trading in an area that it has been in for more than 10 years. It touched this level in 2015, and in 16, 17, 18, 19, 20, 22, 2023, and now several times this year. It has just come down from the post COVID inflation highs and now it is bouncing off that long term support line.
Why does this matter? Everything is traded in dollars so it has an impact on almost everything, but it is very influential on the I-fund and I have been debating whether to jump into that 2025 best TSP fund, but if the dollar is going to trend higher, I'd rather not. If it is going to rollover again and break below the support near 97.50, then I want to be in the I-fund.
That was a very successful test of the lows for the stock market yesterday and it looks like a solid low, but that doesn't mean we can't chop around between that low and the recent highs while the bulls and bears battle it out.
The volatility during the day does make it tough on us to time when to get in or out of stocks as what is happening in the morning has not always been how the market has closed. You really have to guess and hope you guessed correctly. If you bought yesterday's weakness in the morning, you ended up getting filled at a much higher price at the close.
The S&P 500 (C-fund) opened lower and quickly tested Friday's lows and the 50-day EMA, held, and reversed higher. As bullish as the stock market has been, I think the benefit of the doubt goes to the bulls to be able to keep things from breaking down. But we never want to underestimate President Trump's ability to shake things up once in a while. Volatility can be a good thing. It's easier than than done, but the play on these is to buy the dips, and has been all year, although April's dip was diaper worthy.
ACWX (I-fund) has been rebounding off of Friday's lows as well, although it didn't quite move back into positive territory for the day like the small caps did yesterday. The bottom of the trading channel remains intact for now, and yesterday's positive reversal helps the case for the lows being in.
BND (bonds / F-fund) rallied and easily broke through two tough layers of resistance yesterday to close at a new high. It looks good but we haven't seen the 10-year Treasury Yield below 4% in a while, and it is finding support just above it right now. That yield would probably have to fall to a new low for this to keep rising.
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 opened sharply lower yesterday and Friday's lows, which I harped on in yesterday's commentary, was quickly retested and held like a champ. Technically we could still call that a "V" bottom since the lows were so close together, but it was a successful test and whether it needs another test remains to be seen. For now, the emphatic test and reversal back up was very impressive and convincing.
Remember, because of the holiday on Monday, the daily TSP Fund returns below represent the market action from both Monday and Tuesday combined.
| Daily TSP Funds Return
More returns |
Nvidia, the largest weighted stock in the S&P 500 and Nasdaq, was down 4.4% yesterday and that helped cloak a very strong day for the stock market yesterday. Nvidia is not in the Dow or the small cap indices and they did well.
You can see how lopsided the advancing issues and trading volume was compared to the declining, but because Nvidia was down so heavily, and to a lesser degree the 2nd thru sixth highest weighted stocks in the Nasdaq were also down, the Nasdaq Index was down sharply on the day, and it took the S&P 500 down some with it.
The broader market did very well, and you can see that in our S-fund, the DWCPF Index, which is basically every stock in the US stock market sans the S&P 500 companies. It had an amazing day and the positive outside reversal day tells us something very good is happening. Not that it can't go back and retrace some of that large positive candlestick, but the recent lows look very firm for now.
Lower interest rates are coming and that's one reason why the small caps may finally be ready to play catch up. Bond yields are also moving lower and we see the 10-Year Treasury Yield flirting with its recent lows. It closed at 4.02% yesterday and it hasn't closed below 4.0% since the bottom of the Tariff Tantrum in stocks back in April.
I've been a little obsessed with the dollar in recent months (if you haven't noticed) and the outlook for the dollar on Wall Street seems to have been very bearish, which of course means it tends to do the opposite, and that's what we've seen for the last month or more - a big rally in the dollar.
In reality, the dollar is trying to hold at long-term support and it is trading in an area that it has been in for more than 10 years. It touched this level in 2015, and in 16, 17, 18, 19, 20, 22, 2023, and now several times this year. It has just come down from the post COVID inflation highs and now it is bouncing off that long term support line.
Why does this matter? Everything is traded in dollars so it has an impact on almost everything, but it is very influential on the I-fund and I have been debating whether to jump into that 2025 best TSP fund, but if the dollar is going to trend higher, I'd rather not. If it is going to rollover again and break below the support near 97.50, then I want to be in the I-fund.
That was a very successful test of the lows for the stock market yesterday and it looks like a solid low, but that doesn't mean we can't chop around between that low and the recent highs while the bulls and bears battle it out.
The volatility during the day does make it tough on us to time when to get in or out of stocks as what is happening in the morning has not always been how the market has closed. You really have to guess and hope you guessed correctly. If you bought yesterday's weakness in the morning, you ended up getting filled at a much higher price at the close.
The S&P 500 (C-fund) opened lower and quickly tested Friday's lows and the 50-day EMA, held, and reversed higher. As bullish as the stock market has been, I think the benefit of the doubt goes to the bulls to be able to keep things from breaking down. But we never want to underestimate President Trump's ability to shake things up once in a while. Volatility can be a good thing. It's easier than than done, but the play on these is to buy the dips, and has been all year, although April's dip was diaper worthy.
ACWX (I-fund) has been rebounding off of Friday's lows as well, although it didn't quite move back into positive territory for the day like the small caps did yesterday. The bottom of the trading channel remains intact for now, and yesterday's positive reversal helps the case for the lows being in.
BND (bonds / F-fund) rallied and easily broke through two tough layers of resistance yesterday to close at a new high. It looks good but we haven't seen the 10-year Treasury Yield below 4% in a while, and it is finding support just above it right now. That yield would probably have to fall to a new low for this to keep rising.
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.
