tsptalk's Market Talk

[tsptalk]

Stocks are flat but mixed this morning, but leaning on the negative side as he Nasdaq just took a turn to the downside after positive open. Yields are up after a better than expected Jobless Claims report.

The dog days of summer will start in the second half of July so the April to early July rally may be put to the test as the easy money off the April oversold lows may be coming to an end..

I've been posting this old chart in my commentary recently, and but it has been working surprisingly well. Today would be day +4 after the 4th of July holiday, suggesting today is positive about 55% of the time, but the average return is basically flat. Yesterday (+3) we got the big gain day, and tomorrow (+5) also has a decent record.



Some time next week, the stronger than average part of July will wane and the stock market will start to have more of a wind in its face through early October. That doesn't mean stocks will be down - rather that seasonality is no longer a benefit but possibly a hindrance.

 

[tsptalk]

Stocks opened lower this morning as the tariff show resumes. The market may be in search of a reason to do some backing and filling after the recent rally, and nothing like some tariff headlines to shake things up and increase volatility.

The under-invested are welcoming it and that could mean dip buyers won't be too far off. The charts look good, but a little extended and a little choppiness or volatility wouldn't be the worst thing to happen to the market. However, timing a strong market can be tricky and often backfires.

Last year July, August, and September were all positive months for the S&P 500, but there was a nasty sell off in there that started in mid-July and accelerated into into early August, but it turned out to be a great buying opportunity.




Oil, gold, and most of the cryptos are all up big. Bitcoin hit 118,000 this morning.

 

[tsptalk]

 

[tsptalk]

The CPI report came in a little hotter than expected sending yields and the dollar higher, and that is adding some pressure to what was looking like a very positive open for stocks.

The rising support is holding and we got a gap up open on the S&P 500, but yields and the dollar started to move higher and while it is just some backing and filling of the opening gap so far, stocks have lost a little steam. The S and I funds are down modestly, but there's a long day of trading ahead and we'll see if the bulls can battle back like they have been.



Large cap tech is actually an exception today as it is doing well and pushing the Nasdaq to another new high this morning.

So far yields have held in a range between about 4.1% and 4.6% but the shorter term trend is moving up now after breaking out earlier this month.



The dollar too has been strong this month and that's causing the I-fund to lag.

Bitcoin is off yesterday's highs, gold is down, and oil is flat.

We'll get the PPI report tomorrow and we'll have to wait to see if that confirms today's warm CPI data.

Hey! I didn't mention seasonality for once. Oops!

 

[tsptalk]

Stocks have been hovering near the flat line this morning , at least the S&P 500 and Nasdaq, while small caps are doing a little better with yields down this morning after a cooler than expected PPI report.

The 10-year yield has given up about half of Tuesday's gain after a flat PPI report. The report showed no wholesale price increase in June, although it did revise May's up quite a bit.

The year to date chart (2nd below) shows that yields, outside of the April tariff tantrum, have been very stable and hovering between 4.1% and 4.6% and that has allowed the stock market, as well as businesses, to do business without concern for adjusting to wildly swinging rates.



That is compared to the post Covid yields (zoomed out 5 years) that helped cause the 2021 - 2023 inflation and 2022 bear market.

So far so good right now but the 10-year has been rallying in July and if we start seeing 4.7% and higher, that's when the stock market could get cranky.

The CPI on Tuesday did cause some concerns about inflation and the yield moved up to 4.5%, but today's PPI is easing come of those concerns and yields are dipping back.

 

[tsptalk]

If you ever wondered what would happen to the dollar if Trump threatens to fire Powell...

President Donald Trump plans to fire Federal Reserve Chairman Jerome Powell “soon,” according to a White House official.

 

[tsptalk]

If you ever wondered what would happen to the dollar if Trump threatens to fire Powell...

View attachment 69693

And after Trump says that's "highly unlikely"...

 

[tsptalk]

We got some better than expected economic data this morning with retail sales beating estimates, and the jobless claims were also better than expected.

Despite that strong data, the 10-year yield is down slightly this morning and that combination is giving small caps a boost. The I-fund is lagging in early trading as the dollar is up on the economic data.

Over all we see a buoyant market after yesterday's positive reversal day, and the charts look pretty good after the recent consolidation, but as I have been harping on the last couple of day, the negative outside reversal day on Tuesday in the small caps may be sending a warning, despite today's rally. It has retraced much of that breakdown candlestick and that could pose some resistance near 224 on the IWM Russell 2000 ETF.




Oil is flat, gold is down sharply, and bitcoin is churning near 119,000 after the recent breakout to new highs.

 

[tsptalk]

There's a slow, choppy start on Wall Street this morning. Yields and the dollar are down despite some stronger than expected housing data - something that has been weak lately.

The S&P 500 (C-fund) came into today with a again of 0.61% for the week and with the indices near flat, it looks safe, but there's a long day of trading left.

This week we saw the July seasonality chart turn from very bullish on Monday, to today, the 18th, which starts a more bearish period for stocks, although it is short-lived.



Oil and gold are up, bitcoin is down, and ethereum is up 4% and it has become one of the hottest cryptocurrencies.

 

[tsptalk]

A good start for the market this Monday morning. Stocks are up, bonds - up, crypto - up, Gold - up. Oil - down, Yields - down, Dollar - down.

That's a good combination.

The breakout above the recent highs is looking like a solid chart breakout. Stretched to the point of cringy is how I would define this current market rally.

It reminds me of 1998. Not that I have a full memory of that time but I remember that summer well because back then we had to make our TSP transactions by the 15th of the month to be in the new funds by the 1st of the following month. -- I know.

I'll never forget this. In one of my early attempts to get involved with timing my TSP, in 1998 the stock market was going wild as the world was embracing the new internet. I don't recall my actual transaction, if I had been all G-fund or just partial, but in mid-July I knew I was missing a good rally so I bought in 100% stock funds (I think we only had the C-fund back then) by the 15th, so it took effect on Aug 1.

August was down 14% that year.




Moral? Rallies can and will last longer than we think possible, but when you can't take it anymore and you decide to chase, it means the rally is about to correct.

 

[WorkFE]

Rallies can and will last longer than we think possible, but when you can't take it anymore and you decide to chase, it means the rally is about to correct.

Has happened to me more times than I care to remember. It's almost like the Market is just waiting for YOU.

 

[nasa1974]

Looked good early today. The close not so good.

 

[tsptalk]

https://twitter.com/x/status/1947429961704370297

 

[tsptalk]

Stocks are mixed this morning with the Dow up, the S&P and Nasdaq down, and small caps testing and holding at key resistance in the early trading.

The 10-year yields is down to 4.35% and that's helping the small caps lead this morning. The S-fund came down to test the top of the old channel and it has held so far. A close or two below it would likely send it back to the bottom of the channel or even fill that open gap, but the bulls are fighting this morning to keep that from happening.




Bitcoin is up big today but still below last week's highs. Oil is down and gold is up.

Tesla and Google (Alphabet) both report earnings after the bell tomorrow.

 

[tsptalk]

Yields and the dollar are up this morning after the trade deal was announced with Japan. That however, is not stopping the small caps and I-fund from leading again today. Japan's market was up 3.5% last night on the news.




The other indices are mostly higher morning with modest gains in the S&P 500, and while it is early and things could get hot as the day goes on, I am surprised at the muted reaction to the trade deal, considering Japan is one of our biggest trading partners and it was unexpected, so is that telling us that trade deals are basically priced in already?

Tesla and Google report after the closing bell today, kicking off the Mag 7 earnings.

Gold, oil, and bitcoin are all down this morning.

 

[tsptalk]

The other indices are mostly higher morning with modest gains in the S&P 500, and while it is early and things could get hot as the day goes on, I am surprised at the muted reaction to the trade deal, considering Japan is one of our biggest trading partners and it was unexpected, so is that telling us that trade deals are basically priced in already?

OK, this is a better reaction.

 

[tsptalk]

We are seeing modest gains in the S&P and Nasdaq in early trading this morning thanks to Google and some sympathy trading in tech, but the GOOG chart may need some help as it has deteriorated since the opening bell.



The Dow is down 200 thanks to big losses in IBM, UNH, and Honeywell.

Yields are up and the dollar is flat and we're seeing some give back in small caps and the I-fund after yesterday's big days.

Oil is up, gold is down, and bitcoin is flat.

 

[tsptalk]

A quiet, mixed morning for stocks, which is more of the same from yesterday with small caps and the I-fund lagging while yields and the dollar move up this morning.

The Dow, S&P, and Nasdaq are all up about 0.25% while the Russell 2000 small cap index is down, although the S-fund' DWCPF is up modestly as well, so whatever is bugging the small caps, isn't as threatening to the mid-caps.

The I-fund (ACWX) is down filling in Wednesday's open gap, but still up nicely for the week.




Gold, oil, and crypto are all down with the dollar's strength.

Next week will be a little busier with mag 7 earnings, the FOMC meeting, and the jobs report on Friday.

 

[tsptalk]

Stocks are mixed to flat this Monday morning, despite the news of the big trade deal with the EU over the weekend. Yields and the dollar are up putting pressure on the TSP S and I-funds while the C-fund is up just slightly.

The gap up higher in the dollar translated into a gap down for the I-fund which is filling another gap from last week. So far this I-fund (ACWX) loss looks orderly and the upward trend is still intact, but the dollar chart (UUP) below, shows some strength that may be turning this into a new uptrend? That could change the bullish environment for the I-fund, but it hasn't yet.



Oil is up over $1. Gold is down sharply, and bitcoin is giving back some of this weekend's gains.

 

[tsptalk]

Another slow day as the Fed begins day one of their two-day meeting today, but we won't get any word until tomorrow at 2 PM ET.

Stocks are near flat at this time (just before 11 AM ET) but the dollar is rallying and yields are dropping - an interesting combination.



Mag 7 earnings resume tomorrow after the closing bell so we may see a lot of churning between now and when the action starts after tomorrow's Fed meeting wraps up.

Oil and gold are up this morning despite the big gain in the dollar so that's some good relative strength. Bitcoin is flat and still just below the all time highs.,