Stocks were down on Thursday and for the S&P 500 it was just the second negative close in the last 13 trading days. The Dow fell about 250-points and it's been a different story for the Dow which has only been up once in December. The I-fund continued its come back as it (the index it tracks) had another healthy gain near a half of a percent. Bonds were relatively flat on the day.
One thing that may be changing is that the stock market could start to decouple, to some extent, from the wiggles of the yield on the 10-Year Treasury Bill. During much of the fall and over the summer, the stock market was living and dying on the direction of yields. If yields were up, stocks stumbled. If yields fell down, stocks rallied.
Now that the Federal Reserve has indicated that they will be less aggressive with interest rate cuts because of the resilience of the economy, the stock market, and to some degree the stabilizing of inflation, the stock market has gone back to a more conventional approach to yields where it seems to prefer stronger economic data, where previously strong data sent yields up and stocks down.
That brings us to Friday's November jobs report. Estimates are expecting a gain of 200,000 to 220,000 jobs, and while the stock and bond markets don't want anything too hot, it probably would prefer a robust number at the higher end of the estimate range, rather than a big miss. And it may be robust because of the comparison to the weak jobs report we had last month which was impacted by the hurricanes and the Boeing strike, producing just 12,000 jobs in October.
The unemployment rate will likely be 4.1% and 4.2% and here the 4.2 % may be more preferred by the stock market as it may help with the December rate cut, but again, the Fed isn't really as concerned about the labor market at this time. One issue, these jobs reports have been revised down repeatedly over the last two years, so it's tough to trust the number. That means last month's poor report may be changed as well - but perhaps it will be on the upside, although that hasn't been the trend.
As I have been saying, the 10-year yield seems to be stabilizing and perhaps trading in a range rather than trending up or down. That would be ideal. If it did fall below 4.1% (not to be confused with the 4.1% unemployment rate) it nudges the Fed to cut rates, but it could tell us a weaker story for the economy. I would say 4.0% to 4.5% is a good range with some wiggle room for slightly better, or slightly worse than expected economic data. The support near 4.15% has been firm for the last week.
The dollar is also falling and yesterday' close below both the 20-day EMA and the rising support line, could turn into a breakdown. I like to give it a few days to decide when charts do first break support or resistance, but you can see below how much the I-fund has appreciated that pullback. So, if the 29.8 level above breaks down, it could be the I-fund's turn to shine after a long dry period.
ACWX (the I-fund tracking index) was up 0.55% yesterday. That's a breakout but it's just day two above resistance, but it is also three closes above the 50-day EMA. This could be for real if the jobs report doesn't ruin it on Friday.
You can see the updated I-fund and other TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
The market leading Dow Transportation Index has taken a big hit in December, and this is a negative divergence for the broader market, although it remains in the ascending red trading channel after an aggressive move above it last month. You can see the key support below near 16,750.
The December seasonality chart does start to stumble for several days, and that may have started. As I talked about the other day, whether it is worth trying to get cute and time a short-term pullback or not, I don't know. The bulls have been in charge and the dips have been shallow, so there are risks on both sides. The end of December has a great record going back decades that is tough to ignore, but there have been a few December clunkers in recent years (see 2018 and 2022 for a couple of examples.) So, there's no guarantees.
Chart provided courtesy of www.sentimentrader.com
Bitcoin hit a high of 104,000 yesterday, but it fell back below 100,000 so the volatility is still very high as some people buy the new highs and some take profits. It's an emotional level, and the fact that it was as low as 67,500 just a month ago tells us why some might take profits and why others may be experiencing massive FOMO and buying any dip.
The S&P 500 (C-fund) remains in that narrow green channel, which is within the larger red rising channel. There's some overhead resistance above 6100, perhaps closer to 6200 as that line is rising. The breakout above that 6000 area could be tested on the next pullback, similar to the test of the breakout above 5900 -- those two blue horizontal breakout lines. When that happens, who knows? Could be today. Could be weeks. The one in November took just a few days before it started to pull back and this one has closed above that breakout line for the last 5 days.
DWCPF (small caps / S-fund) continues to grind sideways frustrating the bulls and the bears as it looks for its next major direction. The prior two consolidations broke to the upside, but that's not always the case with flat top formations.
BND (bonds / F-fund) also continues to move sideways with those small caps. It looks like a bull flag, which might suggest more upside, but with open gaps both above and below the current level, there could be a lure to either direction in the short-term.
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.
![]() | Daily TSP Funds Return![]() More returns |
One thing that may be changing is that the stock market could start to decouple, to some extent, from the wiggles of the yield on the 10-Year Treasury Bill. During much of the fall and over the summer, the stock market was living and dying on the direction of yields. If yields were up, stocks stumbled. If yields fell down, stocks rallied.
Now that the Federal Reserve has indicated that they will be less aggressive with interest rate cuts because of the resilience of the economy, the stock market, and to some degree the stabilizing of inflation, the stock market has gone back to a more conventional approach to yields where it seems to prefer stronger economic data, where previously strong data sent yields up and stocks down.
That brings us to Friday's November jobs report. Estimates are expecting a gain of 200,000 to 220,000 jobs, and while the stock and bond markets don't want anything too hot, it probably would prefer a robust number at the higher end of the estimate range, rather than a big miss. And it may be robust because of the comparison to the weak jobs report we had last month which was impacted by the hurricanes and the Boeing strike, producing just 12,000 jobs in October.
The unemployment rate will likely be 4.1% and 4.2% and here the 4.2 % may be more preferred by the stock market as it may help with the December rate cut, but again, the Fed isn't really as concerned about the labor market at this time. One issue, these jobs reports have been revised down repeatedly over the last two years, so it's tough to trust the number. That means last month's poor report may be changed as well - but perhaps it will be on the upside, although that hasn't been the trend.
As I have been saying, the 10-year yield seems to be stabilizing and perhaps trading in a range rather than trending up or down. That would be ideal. If it did fall below 4.1% (not to be confused with the 4.1% unemployment rate) it nudges the Fed to cut rates, but it could tell us a weaker story for the economy. I would say 4.0% to 4.5% is a good range with some wiggle room for slightly better, or slightly worse than expected economic data. The support near 4.15% has been firm for the last week.

The dollar is also falling and yesterday' close below both the 20-day EMA and the rising support line, could turn into a breakdown. I like to give it a few days to decide when charts do first break support or resistance, but you can see below how much the I-fund has appreciated that pullback. So, if the 29.8 level above breaks down, it could be the I-fund's turn to shine after a long dry period.
ACWX (the I-fund tracking index) was up 0.55% yesterday. That's a breakout but it's just day two above resistance, but it is also three closes above the 50-day EMA. This could be for real if the jobs report doesn't ruin it on Friday.

You can see the updated I-fund and other TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
The market leading Dow Transportation Index has taken a big hit in December, and this is a negative divergence for the broader market, although it remains in the ascending red trading channel after an aggressive move above it last month. You can see the key support below near 16,750.

The December seasonality chart does start to stumble for several days, and that may have started. As I talked about the other day, whether it is worth trying to get cute and time a short-term pullback or not, I don't know. The bulls have been in charge and the dips have been shallow, so there are risks on both sides. The end of December has a great record going back decades that is tough to ignore, but there have been a few December clunkers in recent years (see 2018 and 2022 for a couple of examples.) So, there's no guarantees.

Chart provided courtesy of www.sentimentrader.com
Bitcoin hit a high of 104,000 yesterday, but it fell back below 100,000 so the volatility is still very high as some people buy the new highs and some take profits. It's an emotional level, and the fact that it was as low as 67,500 just a month ago tells us why some might take profits and why others may be experiencing massive FOMO and buying any dip.
The S&P 500 (C-fund) remains in that narrow green channel, which is within the larger red rising channel. There's some overhead resistance above 6100, perhaps closer to 6200 as that line is rising. The breakout above that 6000 area could be tested on the next pullback, similar to the test of the breakout above 5900 -- those two blue horizontal breakout lines. When that happens, who knows? Could be today. Could be weeks. The one in November took just a few days before it started to pull back and this one has closed above that breakout line for the last 5 days.

DWCPF (small caps / S-fund) continues to grind sideways frustrating the bulls and the bears as it looks for its next major direction. The prior two consolidations broke to the upside, but that's not always the case with flat top formations.

BND (bonds / F-fund) also continues to move sideways with those small caps. It looks like a bull flag, which might suggest more upside, but with open gaps both above and below the current level, there could be a lure to either direction in the short-term.

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.