The winning streak for the S&P 500 hit six days yesterday as stocks rallied on Monday, and small caps continue to steal the show. The S&P 500 moved above 6000 but failed to close above it and we may have had a negative reversal set up be on the lookout for a possible pre-holiday reversal. Bonds were up big as yields fell after Trump's nominee for Treasury Secretary was announced.
I went all out yesterday touting the seasonal tendencies for this week and into the end of the year, and we showed the average and median returns for each day during Thanksgiving week. There were some very good years and some bad, but the average gains were mostly positive, although, outside of Wednesday, perhaps only modestly so.
Yesterday the S&P 500 was up 0.30%. The small caps of the Russell 2000 was up 1.47% yesterday and the S-fund gained 1.25%. So at this point, even if stocks are flat for the rest of the week, we can probably declare this a victory for the seasonality data.
Why do I say that? Well, I was a little concerned with the late action yesterday. Most of the indices made their highs of the day near 11:30 AM ET, and then they spent the rest of the day drifting lower off those highs, creating possible reversal patterns. The Russell 2000 was up over 2% at one point before slipping. It could be nothing, but the negative kangaroo tail often leads to a down day or worse, and with that open gap below on this Russell 2000 ETF, there's a technical reason to do some cleaning up and perhaps filling that gap.
If you read the commentary regularly you know we talk about holiday reversals, and if we didn't have that bullish data above, I might be looking for some possible selling before Thursday. The premise is that stocks come into a holiday week in some kind of trend, and there is often a pre-holiday reversal from that trend heading into the holiday, and then after the holiday the major trend resumes. It doesn't happen every time - it's just a trend.
The S&P 500 made a new intraday high yesterday, but it also drifted off that high and that spinning top candlestick formation where the close is in the middle of a wide trading session range, can be a sign of indecision and possibly a turning point. However...
The Equal Weighted S&P 500 Index - same 500 stocks without large cap weighted influence, did make a new high yesterday, and it did close above that prior high, so the rotation out of the largest of the large caps continues, even in this large cap index.
The 10-year Treasury Yield fell sharply yesterday after the nomination of Scott Bessent as the next Treasury Secretary. Bessent apparently has a pro market, lower taxes, decrease the deficit approach to financing, and he is also less aggressive on tariff's than Trump.
We will get the PCE Prices inflation report on Wednesday so we'll see how serious this decline in yields really is.
The market and TSP are closed on Thursday for Thanksgiving and then Friday there will be just a half day of trading, although that won't impact the TSP's 12 noon ET deadline for transactions.
The S&P 500 (C-fund) hit 6000 again, but it's struggling to close above it as we saw a bit of a double top pullback late yesterday. I doubt this will be a major problem, but perhaps we will see the rally stall for a day or two. It is sitting in the middle of the blue rising trading channel so there is room on both sides if this wants to chop around for a while before breaking out. But the bulls do have the seasonal advantage.
DWCPF (S-fund) had another great day although the close wasn't great as we have a negative reversal day. The old, now broken resistance line could try to hold as support now, but the open gap may want to get filled before moving higher.
ACWX was up just 0.28% yesterday, and that was with a big drop in the dollar, so the I-fund may pay a little more than that. The chart finally came off the 200-day EMA and it closed above that channel again, but it still has work to do as prior attempts to breakout failed.
You can see the updated TSP prices and returns posted by about 8:30 PM ET daily here: https://www.tsptalk.com/tsp_share_prices.php
BND (bonds / F-fund) did breakout as yields fell sharply. It took a news headline (Bassent's nomination) to break the downtrend, so now we wait to see if it holds.
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 went all out yesterday touting the seasonal tendencies for this week and into the end of the year, and we showed the average and median returns for each day during Thanksgiving week. There were some very good years and some bad, but the average gains were mostly positive, although, outside of Wednesday, perhaps only modestly so.
Yesterday the S&P 500 was up 0.30%. The small caps of the Russell 2000 was up 1.47% yesterday and the S-fund gained 1.25%. So at this point, even if stocks are flat for the rest of the week, we can probably declare this a victory for the seasonality data.
Why do I say that? Well, I was a little concerned with the late action yesterday. Most of the indices made their highs of the day near 11:30 AM ET, and then they spent the rest of the day drifting lower off those highs, creating possible reversal patterns. The Russell 2000 was up over 2% at one point before slipping. It could be nothing, but the negative kangaroo tail often leads to a down day or worse, and with that open gap below on this Russell 2000 ETF, there's a technical reason to do some cleaning up and perhaps filling that gap.
If you read the commentary regularly you know we talk about holiday reversals, and if we didn't have that bullish data above, I might be looking for some possible selling before Thursday. The premise is that stocks come into a holiday week in some kind of trend, and there is often a pre-holiday reversal from that trend heading into the holiday, and then after the holiday the major trend resumes. It doesn't happen every time - it's just a trend.
The S&P 500 made a new intraday high yesterday, but it also drifted off that high and that spinning top candlestick formation where the close is in the middle of a wide trading session range, can be a sign of indecision and possibly a turning point. However...
The Equal Weighted S&P 500 Index - same 500 stocks without large cap weighted influence, did make a new high yesterday, and it did close above that prior high, so the rotation out of the largest of the large caps continues, even in this large cap index.
The 10-year Treasury Yield fell sharply yesterday after the nomination of Scott Bessent as the next Treasury Secretary. Bessent apparently has a pro market, lower taxes, decrease the deficit approach to financing, and he is also less aggressive on tariff's than Trump.
We will get the PCE Prices inflation report on Wednesday so we'll see how serious this decline in yields really is.
The market and TSP are closed on Thursday for Thanksgiving and then Friday there will be just a half day of trading, although that won't impact the TSP's 12 noon ET deadline for transactions.
The S&P 500 (C-fund) hit 6000 again, but it's struggling to close above it as we saw a bit of a double top pullback late yesterday. I doubt this will be a major problem, but perhaps we will see the rally stall for a day or two. It is sitting in the middle of the blue rising trading channel so there is room on both sides if this wants to chop around for a while before breaking out. But the bulls do have the seasonal advantage.
DWCPF (S-fund) had another great day although the close wasn't great as we have a negative reversal day. The old, now broken resistance line could try to hold as support now, but the open gap may want to get filled before moving higher.
ACWX was up just 0.28% yesterday, and that was with a big drop in the dollar, so the I-fund may pay a little more than that. The chart finally came off the 200-day EMA and it closed above that channel again, but it still has work to do as prior attempts to breakout failed.
You can see the updated TSP prices and returns posted by about 8:30 PM ET daily here: https://www.tsptalk.com/tsp_share_prices.php
BND (bonds / F-fund) did breakout as yields fell sharply. It took a news headline (Bassent's nomination) to break the downtrend, so now we wait to see if it holds.
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.html
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.
