04/17/26
The rally in stocks continued yesterday with another moderate gain. The day started out on the weaker side but once again the dip buyers showed up, and the support of the breakout level held on the S&P 500. The I-fund lagged yesterday but after a near 9% move higher this month, we shouldn't be surprised if we see a pause at some point.
It's tough to argue with new highs, and the rally has certainly been explosive - one of the fastest 10% plus rallies we have seen in some time. But has it come too far, too fast? Is it due for a double top pullback? Have investors gotten too bullish with the situation in Iran still going on?
I don't know the answers, but the risk reward after the last two weeks has become a little more on the risky side - at least in the short-term. This move off the lows is very likely a bottom for now, but there is room for profit taking up here, and that could produce a pullback of some size. But just like in 2025, many folks did not get on this rebound train, and that means there are plenty of dip buyers out there, so any pullback may be brief and / or shallow.
Things look good, and while history suggests more volatility into the fall during midterm election years, I will look at that as an opportunity as the final quarter of midterm years are actually very strong historically.
That's the good news, and there are a lot of reasons to be optimistic, but let's talk macro for a minute, just to bring a little reality back to this all or nothing stock market.
A-I technology may lead the market higher in the same way that the internet did in the late 1990's, but we still have insane national debt, and we have heard from many very smart folks, who have played very important rolls in the financial world over the years, trying to give us all a wake up call.
Remember Henry Paulson - former Goldman Sachs CEO and a Secretary of the Treasury 20 some years ago? He's recently called for a crash of the bond market.
How about Ray Dalio? He started Bridgewater Associates, which became the world's largest hedge fund in 2005. He's banging the same drum.
We've been hearing of this debt bubble for years, if not decades, and I think we've become immune to the doomsday talk.
I know I feel like, if things are going to fall apart, it won't happen all at once, so we should see it coming and be able to avoid some of the damage, but a breakdown in the economy, whether this year or 5 or 10 years from now, will impact us all, even if our accounts are in cash.
I just heard another notable economist say something very profound: Mohamed El-Erian from Allianz said, it is better (or easier) to fix your roof while it is still sunny outside. I feel like I can fix things the day before the storm, but that's probably unlikely.
Most of us here (on TSP Talk) are not buy and holders, but the typical buy and hold investor who pays little attention to the financial news, probably won't feel any pain or notice what is happening until it may be too late. I just want to throw it out there with the thought that this may be coming, and we need to keep our ear to the ground to listen for it coming, so we can be somewhat prepared.
That said, the market is on a roll and there's no need to hide in a bunker just yet, although it is easier to sell when you can, rather than when you have to. Just be careful and don't get too complacent when things are good, or look good, because there is likely a dark cloud that is eventually coming over the horizon.
I know, that was dark, but I think we will be dealing with it one day, but for now I'll take it one day at a time.
The price of oil was up sharply yesterday, and the stock market barely blinked. Support held on Wednesday but it is now going to be tested on the upside by the descending resistance line. Even with the crazy swings, the chart still looks fairly orderly, and sometimes just looking at the charts and not the headlines is a better way to understand what is happening. All I want to know here is whether support or resistance is going to break first.
The S&P 500 (C-fund) made anther new high on Thursday, so that's two closes above the breakout line. I feel better after 3 to 5 days to confirm a breakout, but this is a start. The open gaps are obvious and I think filling the higher one would be constructive, rather than just a continued move higher, which becomes more vulnerable to steep declines. Building a base makes things more solid.
The 10-year Treasury Yield was up, and while I started to see a possible head and shoulders formation, the bull flag (blue) is still intact, keeping an upside breakout still a possibility. And after my rant about the bond / debt market concerns, I have to leave the door open for a possible move up in yields.
Netflix reported earnings last night and was down sharply initially after the announcement.
They aren't a big market mover, nor do they represent the future of our economy, but with earnings season coming up, we might expect volatility to perk up again. Maybe not to the extent of the Iran war action, but to some extent as each company reports.
Additional TSP Fund Charts:
DWCPF (S-fund) is still reaching for its all time highs. It looks like a very promising chart, but like everything else, it has come a long way in a short amount of time. A right shoulder consolidation could fill in at least one of those open gaps, and that would give the chart a stronger base from which to make new highs.
ACWX (I-fund) has been lagging recently, and while the dollar has been coming down (although up yesterday) it hasn't been helping the I-fund make new highs, despite leading the TSP funds for the month. It's the price of oil that has been holding it back recently, and oil was up sharply yesterday.
BND (bonds / F-fund) was down and it is back in, but near, the support of the top of the wedge pattern. I keep flip flopping on my outlook of this fund (F) and feel better equipped to analyze the stock funds. Hank Paulson calling for the crash of the bond market is an attention grabber, but as I said, "they" have been calling for the end of the debt market for many years, so it's tough to take seriously. But they know a lot more than I do about it, so...
Thanks so much for reading! Have a great weekend!
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.
The rally in stocks continued yesterday with another moderate gain. The day started out on the weaker side but once again the dip buyers showed up, and the support of the breakout level held on the S&P 500. The I-fund lagged yesterday but after a near 9% move higher this month, we shouldn't be surprised if we see a pause at some point.
| Daily TSP Funds Return More returns |
It's tough to argue with new highs, and the rally has certainly been explosive - one of the fastest 10% plus rallies we have seen in some time. But has it come too far, too fast? Is it due for a double top pullback? Have investors gotten too bullish with the situation in Iran still going on?
I don't know the answers, but the risk reward after the last two weeks has become a little more on the risky side - at least in the short-term. This move off the lows is very likely a bottom for now, but there is room for profit taking up here, and that could produce a pullback of some size. But just like in 2025, many folks did not get on this rebound train, and that means there are plenty of dip buyers out there, so any pullback may be brief and / or shallow.
Things look good, and while history suggests more volatility into the fall during midterm election years, I will look at that as an opportunity as the final quarter of midterm years are actually very strong historically.
That's the good news, and there are a lot of reasons to be optimistic, but let's talk macro for a minute, just to bring a little reality back to this all or nothing stock market.
A-I technology may lead the market higher in the same way that the internet did in the late 1990's, but we still have insane national debt, and we have heard from many very smart folks, who have played very important rolls in the financial world over the years, trying to give us all a wake up call.
Remember Henry Paulson - former Goldman Sachs CEO and a Secretary of the Treasury 20 some years ago? He's recently called for a crash of the bond market.
How about Ray Dalio? He started Bridgewater Associates, which became the world's largest hedge fund in 2005. He's banging the same drum.
We've been hearing of this debt bubble for years, if not decades, and I think we've become immune to the doomsday talk.
I know I feel like, if things are going to fall apart, it won't happen all at once, so we should see it coming and be able to avoid some of the damage, but a breakdown in the economy, whether this year or 5 or 10 years from now, will impact us all, even if our accounts are in cash.
I just heard another notable economist say something very profound: Mohamed El-Erian from Allianz said, it is better (or easier) to fix your roof while it is still sunny outside. I feel like I can fix things the day before the storm, but that's probably unlikely.
Most of us here (on TSP Talk) are not buy and holders, but the typical buy and hold investor who pays little attention to the financial news, probably won't feel any pain or notice what is happening until it may be too late. I just want to throw it out there with the thought that this may be coming, and we need to keep our ear to the ground to listen for it coming, so we can be somewhat prepared.
That said, the market is on a roll and there's no need to hide in a bunker just yet, although it is easier to sell when you can, rather than when you have to. Just be careful and don't get too complacent when things are good, or look good, because there is likely a dark cloud that is eventually coming over the horizon.
I know, that was dark, but I think we will be dealing with it one day, but for now I'll take it one day at a time.
The price of oil was up sharply yesterday, and the stock market barely blinked. Support held on Wednesday but it is now going to be tested on the upside by the descending resistance line. Even with the crazy swings, the chart still looks fairly orderly, and sometimes just looking at the charts and not the headlines is a better way to understand what is happening. All I want to know here is whether support or resistance is going to break first.
The S&P 500 (C-fund) made anther new high on Thursday, so that's two closes above the breakout line. I feel better after 3 to 5 days to confirm a breakout, but this is a start. The open gaps are obvious and I think filling the higher one would be constructive, rather than just a continued move higher, which becomes more vulnerable to steep declines. Building a base makes things more solid.
The 10-year Treasury Yield was up, and while I started to see a possible head and shoulders formation, the bull flag (blue) is still intact, keeping an upside breakout still a possibility. And after my rant about the bond / debt market concerns, I have to leave the door open for a possible move up in yields.
Netflix reported earnings last night and was down sharply initially after the announcement.
They aren't a big market mover, nor do they represent the future of our economy, but with earnings season coming up, we might expect volatility to perk up again. Maybe not to the extent of the Iran war action, but to some extent as each company reports.
Additional TSP Fund Charts:
DWCPF (S-fund) is still reaching for its all time highs. It looks like a very promising chart, but like everything else, it has come a long way in a short amount of time. A right shoulder consolidation could fill in at least one of those open gaps, and that would give the chart a stronger base from which to make new highs.
ACWX (I-fund) has been lagging recently, and while the dollar has been coming down (although up yesterday) it hasn't been helping the I-fund make new highs, despite leading the TSP funds for the month. It's the price of oil that has been holding it back recently, and oil was up sharply yesterday.
BND (bonds / F-fund) was down and it is back in, but near, the support of the top of the wedge pattern. I keep flip flopping on my outlook of this fund (F) and feel better equipped to analyze the stock funds. Hank Paulson calling for the crash of the bond market is an attention grabber, but as I said, "they" have been calling for the end of the debt market for many years, so it's tough to take seriously. But they know a lot more than I do about it, so...
Thanks so much for reading! Have a great weekend!
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.
