03/16/26
Stocks opened higher on Friday, but the bears didn't take long to drag the indices lower throughout the course of the day. The losses weren't dramatic, but it just felt heavy all day as the bulls had little interest, going into a weekend, to do any bargain hunting. Oil continued to move higher, and that is the current catalyst, and of course all of this will depend on the developments in the Middle East.
The February PCE Prices inflation data was not much of a factor on Friday as the numbers were basically inline with estimates, but it didn't stop yields from moving up because the sky rocketing oil prices didn't start until March and investors know the data could more inflationary going forward. But yields moving up means bond prices are coming down, and with gold closing at a one month low on Friday, there is still no obvious rush into a safety trades.
Here is the 10-year Treasury Yield which is flirting with breaking above those previous highs. As I often say, it's not always the level of the yield that scares the stock market, it is how quickly they are moving as money managers have to make adjustments to their accounts, and look how quickly the 10-year has been moving, whether up or down, recently.
And that is all being driven by the price of oil which is nearing the psychological 100 level. Gasoline prices are up, and while we've been at these levels before, like yields, it is the shock of how quickly they are moving that makes it more concerning.
Above is the 20-year chart of Western Texas Crude Oil prices pushing 100. It was in the triple digits in 2022, but before that is was 2014.
The S&P 500 (C-fund) tested Monday's low on Friday but it was the lowest close of the year and the index is now down over 3% for the year. There is an open gap just below Friday's close, which lines up well with the 200-day moving average near 6600. This would be a very convenient place for the pullback to find support, but it might overshoot to scare more people out before rebounding.
Probably the worst thing that could happen to the stock market would be more action like we saw on Friday where the losses weren't huge, but it was a slow burn of losses with little effort from the bulls. A better set up for the bulls would be panicky action which will cause a capitulation, probably pushing the indices below support and causing stops to get taken out before any snap back rally. The sooner the better for the bulls but these dips always seem to last longer than we expect.
Administrative Note: We have a chance for a little distraction this week with the March Madness Tournament starting. So, if you're ready for our annual March Madness Contest, please go here for more info! It's free and prizes are awarded. The deadline to enter is the start of Thursday's first game.
Additional TSP Fund Charts:
DWCPF (S-fund) closed below its 200-day moving average for a second straight day on Friday. That's concerning but maybe not surprising since the neckline of the head and shoulders pattern broke a week earlier. I know I didn't exactly heed this warning because I keep expecting some kind of headline to reverse this ship back up, even if just temporarily, and it probably is just a matter of time. But how much time?
ACWX (I-fund) also closed at its lowest level of the year and seeing this chart, which was soaring and making new highs in the final week of February, collapsed quickly. The buy and holder of the I-fund is still up 2.3% for the year, but it has fallen about 9% since the peak 2-weeks ago. There is some support in the area that will need to hold or 65 will be in the picture.
BND (bonds / F-fund) has continued to get slammed, and so much for investors jumping into bonds when the stock market and / or the economy are getting into trouble. Again, fast moving yields can scare even the most experienced money manager, and that's what the rapid rise in oil prices is doing to the bond market.
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
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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.
Stocks opened higher on Friday, but the bears didn't take long to drag the indices lower throughout the course of the day. The losses weren't dramatic, but it just felt heavy all day as the bulls had little interest, going into a weekend, to do any bargain hunting. Oil continued to move higher, and that is the current catalyst, and of course all of this will depend on the developments in the Middle East.
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The February PCE Prices inflation data was not much of a factor on Friday as the numbers were basically inline with estimates, but it didn't stop yields from moving up because the sky rocketing oil prices didn't start until March and investors know the data could more inflationary going forward. But yields moving up means bond prices are coming down, and with gold closing at a one month low on Friday, there is still no obvious rush into a safety trades.
Here is the 10-year Treasury Yield which is flirting with breaking above those previous highs. As I often say, it's not always the level of the yield that scares the stock market, it is how quickly they are moving as money managers have to make adjustments to their accounts, and look how quickly the 10-year has been moving, whether up or down, recently.
And that is all being driven by the price of oil which is nearing the psychological 100 level. Gasoline prices are up, and while we've been at these levels before, like yields, it is the shock of how quickly they are moving that makes it more concerning.
Above is the 20-year chart of Western Texas Crude Oil prices pushing 100. It was in the triple digits in 2022, but before that is was 2014.
The S&P 500 (C-fund) tested Monday's low on Friday but it was the lowest close of the year and the index is now down over 3% for the year. There is an open gap just below Friday's close, which lines up well with the 200-day moving average near 6600. This would be a very convenient place for the pullback to find support, but it might overshoot to scare more people out before rebounding.
Probably the worst thing that could happen to the stock market would be more action like we saw on Friday where the losses weren't huge, but it was a slow burn of losses with little effort from the bulls. A better set up for the bulls would be panicky action which will cause a capitulation, probably pushing the indices below support and causing stops to get taken out before any snap back rally. The sooner the better for the bulls but these dips always seem to last longer than we expect.
Administrative Note: We have a chance for a little distraction this week with the March Madness Tournament starting. So, if you're ready for our annual March Madness Contest, please go here for more info! It's free and prizes are awarded. The deadline to enter is the start of Thursday's first game.
Additional TSP Fund Charts:
DWCPF (S-fund) closed below its 200-day moving average for a second straight day on Friday. That's concerning but maybe not surprising since the neckline of the head and shoulders pattern broke a week earlier. I know I didn't exactly heed this warning because I keep expecting some kind of headline to reverse this ship back up, even if just temporarily, and it probably is just a matter of time. But how much time?
ACWX (I-fund) also closed at its lowest level of the year and seeing this chart, which was soaring and making new highs in the final week of February, collapsed quickly. The buy and holder of the I-fund is still up 2.3% for the year, but it has fallen about 9% since the peak 2-weeks ago. There is some support in the area that will need to hold or 65 will be in the picture.
BND (bonds / F-fund) has continued to get slammed, and so much for investors jumping into bonds when the stock market and / or the economy are getting into trouble. Again, fast moving yields can scare even the most experienced money manager, and that's what the rapid rise in oil prices is doing to the bond market.
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.
