It has really been an odd few weeks in the stock market because, as well as the indices have been doing, it has been rare to see all of the major indices moving in the same direction. On Friday we saw the S&P, Nasdaq and small caps post decent gains, while the Dow and the Transports were down. Bonds rallied as yields fell, and the I-fund slipped on dollar's strength.
The Dow has been stuck below the 45,000 area for almost two weeks, but the S&P 500 and Nasdaq are sitting at all time highs. The pullback in the small caps of the Russell 2000 hasn't done much damage to the S-fund, which has been assisted by the midcap caps stocks that are in that fund.
Of course the S-fund is coming off a 12% gain in November so a little pause seems reasonable, but is it pausing or getting ready to pull back like the Russell 2000 (IWM) or the Transports?
The market leading Transportation Index has moved down hard since Thanksgiving week but it is nearing support that has been holding for a few months - the 50-day EMA.
The Russell 2000 was up on Friday, but it is in the midst of a needed rest after the big gains in November. The pullback looks like a bull flag so this doesn't appear to be anything more than a pause at the moment.
The 10-year Treasury Yield fell again on Friday and it is now testing its 200-day average and the rising support line. It's interesting that this is finally pulling back after the Fed has been less dovish and about interest rate cuts.
The dollar was up on Friday but it has also been pulling back and that has benefited the I-fund this month. It has fallen below some rising support, but the 20-day EMA is still trying to hold on. The next leg for the I-fund may depend on whether this breaks down or not. The I-fund does better when the UUP is falling.
This chart from out friends over at sentimenTrader.com shows us what happened to the S&P 500 after prior times when the S&P 500 made 56+ new highs in a one year period. Over the next month it was a little better than 50/50 but going out 2, 3, and 6 months, stocks did quite well, with a 100% positive record going out those 6-months.
Chart provided courtesy of www.sentimentrader.com
This week we will get more inflation data with the CPI report on Wednesday, and the PPI Producer Prices report on Thursday.
Stay updated on the strategies TSP Talk AutoTracker members by subscribing to the Last Look Report featuring IFTs from leading members and insights from the TSP Talk AutoTracker community. More info here.
The S&P 500 (C-fund) made yet another new all-time high on Friday. The narrow ascending trading channel remains intact, and at some point this is likely going to test the breakout area just above 6000, but it's tough to say when -- this week, or next month? The chart is getting quite extended above its 200-day EMA, which I don't even have drawn in, but it is currently 5486. I assume that pullback is in store for the index at some point, likely some time next year, and so I wouldn't look away for too long. It's coming, but when?
DWCPF (small caps / S-fund) continues to trade in a tight range as it builds up strength for its next major move. There's no guarantees, but it looks like a pretty bullish chart right now.
ACWX (the I-fund tracking index) was down 0.18% on Friday. The I-fund lost 0.17% so the ACWX is getting better at predicting the I-fund return on a daily basis. That was a nasty negative reversal on Friday, after it filled the top of the open gap and stalled.
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
BND (bonds / F-fund) rallied again keeping the new bullish trend in bonds and the F-fund alive. It's nearing that overhead open gap, but there still an open gap below as well.
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.
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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.
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I don't know how it feels to you, but I have felt that the market is getting choppier and even investor sentiment has become less bullish in recent days, yet the S&P 500 has been up 12 of the last 14 trading days, so it's possibly just the volatility in the Dow, and the pullback in the Russell 2000 and Dow Transportation Index that makes it feel as if something isn't right. The geopolitical events in Syria isn't helping ease those concerns, but looking at the overnight futures, everything appears to be flag - even oil, despite persistent Mid East issues.The Dow has been stuck below the 45,000 area for almost two weeks, but the S&P 500 and Nasdaq are sitting at all time highs. The pullback in the small caps of the Russell 2000 hasn't done much damage to the S-fund, which has been assisted by the midcap caps stocks that are in that fund.
Of course the S-fund is coming off a 12% gain in November so a little pause seems reasonable, but is it pausing or getting ready to pull back like the Russell 2000 (IWM) or the Transports?
The market leading Transportation Index has moved down hard since Thanksgiving week but it is nearing support that has been holding for a few months - the 50-day EMA.

The Russell 2000 was up on Friday, but it is in the midst of a needed rest after the big gains in November. The pullback looks like a bull flag so this doesn't appear to be anything more than a pause at the moment.
The 10-year Treasury Yield fell again on Friday and it is now testing its 200-day average and the rising support line. It's interesting that this is finally pulling back after the Fed has been less dovish and about interest rate cuts.

The dollar was up on Friday but it has also been pulling back and that has benefited the I-fund this month. It has fallen below some rising support, but the 20-day EMA is still trying to hold on. The next leg for the I-fund may depend on whether this breaks down or not. The I-fund does better when the UUP is falling.
This chart from out friends over at sentimenTrader.com shows us what happened to the S&P 500 after prior times when the S&P 500 made 56+ new highs in a one year period. Over the next month it was a little better than 50/50 but going out 2, 3, and 6 months, stocks did quite well, with a 100% positive record going out those 6-months.

Chart provided courtesy of www.sentimentrader.com
This week we will get more inflation data with the CPI report on Wednesday, and the PPI Producer Prices report on Thursday.
Stay updated on the strategies TSP Talk AutoTracker members by subscribing to the Last Look Report featuring IFTs from leading members and insights from the TSP Talk AutoTracker community. More info here.
The S&P 500 (C-fund) made yet another new all-time high on Friday. The narrow ascending trading channel remains intact, and at some point this is likely going to test the breakout area just above 6000, but it's tough to say when -- this week, or next month? The chart is getting quite extended above its 200-day EMA, which I don't even have drawn in, but it is currently 5486. I assume that pullback is in store for the index at some point, likely some time next year, and so I wouldn't look away for too long. It's coming, but when?

DWCPF (small caps / S-fund) continues to trade in a tight range as it builds up strength for its next major move. There's no guarantees, but it looks like a pretty bullish chart right now.

ACWX (the I-fund tracking index) was down 0.18% on Friday. The I-fund lost 0.17% so the ACWX is getting better at predicting the I-fund return on a daily basis. That was a nasty negative reversal on Friday, after it filled the top of the open gap and stalled.

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
BND (bonds / F-fund) rallied again keeping the new bullish trend in bonds and the F-fund alive. It's nearing that overhead open gap, but there still an open gap below as well.

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.
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