Stocks were mixed after a strong early rally faded into the close. The Dow and the small caps of the Russell 2000 closed slightly negative, but the S&P 500 and Nasdaq held onto decent gains. We also saw the S-fund's small and midcap index close with a moderate gain, and the I-fund actually led on the day thanks to a decline in the dollar.
You can see the latest updated TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
With Trump returning to the helm, we are back at the mercy of the tariff talk, which is something the stock market had to endure during his first term. Good or bad for stocks, it certainly pumps up volatility and that's what happened yesterday.
The Washington Post reported that an anonymous Trump aide source said that Trump is backing off from his tough stance on tariffs and on that news the dollar fell sharply and stocks rallied. It took a couple of hours but Trump denied the claims on social media and the market started to back off a little.
Yields shot up on the initial news but they backed off some as well, however they were still up on the day. We have a small double top formation on the 10-year Yield, but this chart looks like it wants to eventually go higher. That would not be the best outcome for the small caps. Large caps can better withstand higher moves in rates and yields.
The dollar fell sharply on that news and that helped the I-fund to a big day, but even though it led to a big gain in the I-fund, that chart (see below) still looks vulnerable.
ACWX (the I-fund tracking index) was up 0.75% yesterday and the I-fund was given a gain of 0.89%. That bear flag is still alive and concerning.
The bear flags are popping up everywhere. Yesterday I gave the case for why the bear flags on the S-fund chart may be OK - because we saw three similar prior bear flags that worked out well of the small caps. But can it do it again?
The Russell 2000 chart stalled at the 50-day EMA yesterday, it is below the descending resistance line, and the bear flag is waving right at us. I want to like the small caps but from a technical analysis standpoint, this now looks concerning as well.
That goes for the S-fund small cap index as well, although there was one minor difference in the chart above - it actually moved above its 50-day EMA yesterday, but it did create a negative reversal day.
The economy has been stubbornly strong in recent months but that Dow Transportation Index chart is not telling us that. Neither are some economically sensitive commodities like copper (bottom chart below.)
This copper chart has to hold that long term support line or it could be a red flag for the economy.
The week after the first week in January has a reputation of being a tougher than a normal week for stocks, and I suppose that is because the first week in January tends to be good, so there can be some profit taking. The percentage of times positive for these days is better than 50% but the average gain / loss has some issues. That starts on the 8th. We get a similar rough week starting on 20th and that may be related to earnings season.
Chart provided courtesy of www.sentimentrader.com
We'll get the December jobs report on Friday and on Thursday the stock market and TSP will be closed in observance of the national day of mourning for Jimmy Carter so we will take the day off as well.
Get in on the Guess the Dow Contest for 2025. A $100 Amazon eGift Card goes to whoever comes closest to guessing the Dow Jones Industrial Average's closing price on Dec 31, 2025. The deadline to enter is TODAY, Jan 7, at 7 PM ET. You must be a TSP Talk forum member to enter.
Admin note: We are offering a discount on our annual subscriptions for a week to new and current subscribers. You can sign up to a new service or add a year or two (in some cases) to your current subscription for 20% off the regular price (or 50% in some cases.) Use this link for more information: TSP Talk - Annual Subscription Sale
The S&P 500 (C-fund) was having a very nice morning, but it hit resistance and started to head toward Monday morning's open gap. Nothing terrible here but we do see some issues in other parts of the market. Can big tech continue to hold up the S&P for another year? A move back to the bottom of that flag-like formation is possible, and while it looks like a bullish flag, we can see the highs trending lower since early December.
BND (bonds / F-fund) is back below its 200-day EMA, in the right shoulder of the head and shoulders pattern, and yields are still moving higher. This looks like trouble for bonds.
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.
| Daily TSP Funds Return
More returns |
You can see the latest updated TSP share prices and returns, usually posted daily by 8:30 PM ET here: https://www.tsptalk.com/tsp_share_prices.php
With Trump returning to the helm, we are back at the mercy of the tariff talk, which is something the stock market had to endure during his first term. Good or bad for stocks, it certainly pumps up volatility and that's what happened yesterday.
The Washington Post reported that an anonymous Trump aide source said that Trump is backing off from his tough stance on tariffs and on that news the dollar fell sharply and stocks rallied. It took a couple of hours but Trump denied the claims on social media and the market started to back off a little.
Yields shot up on the initial news but they backed off some as well, however they were still up on the day. We have a small double top formation on the 10-year Yield, but this chart looks like it wants to eventually go higher. That would not be the best outcome for the small caps. Large caps can better withstand higher moves in rates and yields.
The dollar fell sharply on that news and that helped the I-fund to a big day, but even though it led to a big gain in the I-fund, that chart (see below) still looks vulnerable.
ACWX (the I-fund tracking index) was up 0.75% yesterday and the I-fund was given a gain of 0.89%. That bear flag is still alive and concerning.
The bear flags are popping up everywhere. Yesterday I gave the case for why the bear flags on the S-fund chart may be OK - because we saw three similar prior bear flags that worked out well of the small caps. But can it do it again?
The Russell 2000 chart stalled at the 50-day EMA yesterday, it is below the descending resistance line, and the bear flag is waving right at us. I want to like the small caps but from a technical analysis standpoint, this now looks concerning as well.
That goes for the S-fund small cap index as well, although there was one minor difference in the chart above - it actually moved above its 50-day EMA yesterday, but it did create a negative reversal day.
The economy has been stubbornly strong in recent months but that Dow Transportation Index chart is not telling us that. Neither are some economically sensitive commodities like copper (bottom chart below.)
This copper chart has to hold that long term support line or it could be a red flag for the economy.
The week after the first week in January has a reputation of being a tougher than a normal week for stocks, and I suppose that is because the first week in January tends to be good, so there can be some profit taking. The percentage of times positive for these days is better than 50% but the average gain / loss has some issues. That starts on the 8th. We get a similar rough week starting on 20th and that may be related to earnings season.
Chart provided courtesy of www.sentimentrader.com
We'll get the December jobs report on Friday and on Thursday the stock market and TSP will be closed in observance of the national day of mourning for Jimmy Carter so we will take the day off as well.
Get in on the Guess the Dow Contest for 2025. A $100 Amazon eGift Card goes to whoever comes closest to guessing the Dow Jones Industrial Average's closing price on Dec 31, 2025. The deadline to enter is TODAY, Jan 7, at 7 PM ET. You must be a TSP Talk forum member to enter.
Admin note: We are offering a discount on our annual subscriptions for a week to new and current subscribers. You can sign up to a new service or add a year or two (in some cases) to your current subscription for 20% off the regular price (or 50% in some cases.) Use this link for more information: TSP Talk - Annual Subscription Sale
The S&P 500 (C-fund) was having a very nice morning, but it hit resistance and started to head toward Monday morning's open gap. Nothing terrible here but we do see some issues in other parts of the market. Can big tech continue to hold up the S&P for another year? A move back to the bottom of that flag-like formation is possible, and while it looks like a bullish flag, we can see the highs trending lower since early December.
BND (bonds / F-fund) is back below its 200-day EMA, in the right shoulder of the head and shoulders pattern, and yields are still moving higher. This looks like trouble for bonds.
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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