Stocks floundered on Friday. The I-fund actually led the TSP funds for the week, and that is something new. Yields started to move up again last week and that was a concern but Wednesday's Fed meeting and Friday's PCE Prices inflation report will likely help set the tone for yields for the intermediate term.
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
We will get dozens, if not hundreds, of companies reporting earnings this week, but it's the four Magnificent 7 companies reporting this week that will have the ability to move the market. Meta, Microsoft, and Tesla all report after the closing bell on Wednesday, and Apple reports on Thursday. I originally mentioned that six of the Mag 7 were reporting this week, but I now see that Amazon and Alphabet (GOOG) will actually report next week, so we have several catalysts lined up.
The Federal Reserve is not expected to change interest rates at their meeting on Wednesday but any clues to their next move will certainly impact the markets. The current probability of at least another 0.25% rate cut by the May meeting is near 100%. Current financial conditions are still fairly loose, which is bullish, but the Fed must stay onboard with those policies.
The 10-year Treasury Yield has been forming a right shoulder in a possible head and shoulders formation. Was the pullback that started on the 14th part of a pre-holiday reversal, and simply resumed the upside after the holiday? That would not be good news for stocks, so the bulls will be looking for the right shoulder to fill out and potentially break down as the H&S patterns often do, although they are more likely to break down when the prevailing trend is down, and this one is not down. So, we'll have to see if that 4.5% area holds or not on any further development of that right shoulder.
The dollar has pulled back sharply recently and that is why the I-fund is making a comeback and actually now outperforming the C-fund in the New Year. The 50-day moving average is getting tested now, along with the top of the November peak, so that will be an interesting pivot point for the dollar (UUP.) A break below 29 would open a door for the I-fund to continue to outperform.
The weekly chart of the dollar shows a major breakdown last week and plenty of room for more downside before the weekly support area kick in.
This coming week's mine field of data, earnings, plus the Federal Reverse meeting could make or break the direction of the stock market for the next few weeks. The PCE Prices inflation data comes out on Friday, after the Fed meeting, but they will likely have a good idea of what that data is saying.
The Futures opened up sharply lower on Sunday evening (55 S&P 500 points at this time) and while that does not always translate into a negative open on a Monday open, there's something certainly in the air causing some concern for this busy and potentially volatile week. Beside tariffs being put on and taken off being a market catalyst causing volatility, watch for news about DeepSeek as this Chinese A-I company's advancement are starting to concern the US I-A companies.
The S&P 500 (C-fund) pulled back modestly on Friday after breaking out to new highs the prior day. This still has the potential for a double top pullback, now that the breakout has failed, and the futures show that the open gap down near 6050 could be a target early this week. There is plenty of room below if this does want to back and fill in some of those other open gaps, but the buy the dip mentality has been alive and well early in this new year, and they may be looking at another opportunity this week.
DWCPF (S-fund) has been moving sideways for the last week since last Tuesday's gap up, and that's same type of flat top action that preceded a major pullback in December. Those open gaps suggest that is very possible again, but the bulls may not give up that easily with monetary policies favoring the stock market, and particularly the small caps.
ACWX (the I-fund tracking index) was up 0.50% on Friday and the I-fund was given a gain of 0.52%. The I-fund is looking like it needs to be taken seriously this year, so far, after Friday's breakout above a couple of levels of resistance.
BND (bonds / F-fund) has been coiling in what may be the right shoulder of an inverted head and shoulders pattern. The large gap is still open down by the January lows, so that could be a draw, but the inverted H&S could be a bottoming process, although again, head and shoulders can be continuation patterns of the predominant trend, and that trend is currently down, so it needs some help.
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.
| Daily TSP Funds Return
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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
We will get dozens, if not hundreds, of companies reporting earnings this week, but it's the four Magnificent 7 companies reporting this week that will have the ability to move the market. Meta, Microsoft, and Tesla all report after the closing bell on Wednesday, and Apple reports on Thursday. I originally mentioned that six of the Mag 7 were reporting this week, but I now see that Amazon and Alphabet (GOOG) will actually report next week, so we have several catalysts lined up.
The Federal Reserve is not expected to change interest rates at their meeting on Wednesday but any clues to their next move will certainly impact the markets. The current probability of at least another 0.25% rate cut by the May meeting is near 100%. Current financial conditions are still fairly loose, which is bullish, but the Fed must stay onboard with those policies.
The 10-year Treasury Yield has been forming a right shoulder in a possible head and shoulders formation. Was the pullback that started on the 14th part of a pre-holiday reversal, and simply resumed the upside after the holiday? That would not be good news for stocks, so the bulls will be looking for the right shoulder to fill out and potentially break down as the H&S patterns often do, although they are more likely to break down when the prevailing trend is down, and this one is not down. So, we'll have to see if that 4.5% area holds or not on any further development of that right shoulder.
The dollar has pulled back sharply recently and that is why the I-fund is making a comeback and actually now outperforming the C-fund in the New Year. The 50-day moving average is getting tested now, along with the top of the November peak, so that will be an interesting pivot point for the dollar (UUP.) A break below 29 would open a door for the I-fund to continue to outperform.
The weekly chart of the dollar shows a major breakdown last week and plenty of room for more downside before the weekly support area kick in.
This coming week's mine field of data, earnings, plus the Federal Reverse meeting could make or break the direction of the stock market for the next few weeks. The PCE Prices inflation data comes out on Friday, after the Fed meeting, but they will likely have a good idea of what that data is saying.
The Futures opened up sharply lower on Sunday evening (55 S&P 500 points at this time) and while that does not always translate into a negative open on a Monday open, there's something certainly in the air causing some concern for this busy and potentially volatile week. Beside tariffs being put on and taken off being a market catalyst causing volatility, watch for news about DeepSeek as this Chinese A-I company's advancement are starting to concern the US I-A companies.
The S&P 500 (C-fund) pulled back modestly on Friday after breaking out to new highs the prior day. This still has the potential for a double top pullback, now that the breakout has failed, and the futures show that the open gap down near 6050 could be a target early this week. There is plenty of room below if this does want to back and fill in some of those other open gaps, but the buy the dip mentality has been alive and well early in this new year, and they may be looking at another opportunity this week.
DWCPF (S-fund) has been moving sideways for the last week since last Tuesday's gap up, and that's same type of flat top action that preceded a major pullback in December. Those open gaps suggest that is very possible again, but the bulls may not give up that easily with monetary policies favoring the stock market, and particularly the small caps.
ACWX (the I-fund tracking index) was up 0.50% on Friday and the I-fund was given a gain of 0.52%. The I-fund is looking like it needs to be taken seriously this year, so far, after Friday's breakout above a couple of levels of resistance.
BND (bonds / F-fund) has been coiling in what may be the right shoulder of an inverted head and shoulders pattern. The large gap is still open down by the January lows, so that could be a draw, but the inverted H&S could be a bottoming process, although again, head and shoulders can be continuation patterns of the predominant trend, and that trend is currently down, so it needs some help.
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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