C Fund $SPX

When connecting the major highs from 2024 and October 2025 and projecting that trendline forward, the S&P 500 briefly pushed above this important resistance line before encountering selling pressure. Nevertheless, we elected to maintain our stock fund positions for two reasons. First, both the rising 50-day moving average and the upper boundary of the expanding triangle were expected to provide support, and they ultimately performed that role successfully. Second, because TSP participants are limited to only two interfund transfers per month, these clearly defined support levels argued in favor of patience rather than reacting to what appeared to be a normal pullback. In hindsight, remaining invested proved to be the correct decision.

Since then, the market has stabilized and resumed its advance. Momentum indicators such as RSI and Stochastics have returned to more neutral levels, a development that is generally supportive of further gains. In addition, market breadth remains healthy, and the recent consolidation helped relieve some of the overbought conditions that developed following the powerful rally from the April lows. Overall, the technical backdrop continues to favor the bulls.

Another factor supporting our constructive outlook is seasonality. Historically, June has tended to produce modest gains, while July has been one of the strongest months of the year for equities. While seasonal tendencies should never be relied upon in isolation, they do provide an additional tailwind that supports maintaining a favorable stance toward the stock funds. Consequently, we believe remaining invested continues to offer the best combination of risk and reward at this time.

Fundamentally, the backdrop remains generally supportive of equities despite the ongoing presence of geopolitical and economic uncertainties. During the past week, investors monitored developments surrounding the G7 summit, where world leaders reaffirmed their commitment to maintaining financial stability, supporting Ukraine, strengthening energy security, and improving supply chain resilience. Markets largely interpreted the outcome as constructive, with no major disruptions emerging from the meeting.

Economic data continue to point toward a moderating, but still expanding, economy. Inflation pressures have eased from their peak levels, while the labor market remains relatively resilient. Although growth has slowed from the robust pace experienced earlier in the cycle, the economy has thus far avoided the recession that many had anticipated. Corporate earnings have also remained generally favorable, providing additional support for stock prices.

Investors continue to face a number of uncertainties, including geopolitical tensions, trade policy developments, fiscal concerns, and the timing of future Federal Reserve actions. However, the market has repeatedly demonstrated an ability to absorb these concerns and move higher as long as economic conditions remain stable and earnings expectations hold up.

Looking ahead, attention will remain focused on incoming inflation reports, labor market data, corporate earnings, and any signals regarding future monetary policy. While periods of volatility should be expected, the overall fundamental environment continues to favor economic expansion rather than contraction. Combined with a generally constructive technical backdrop and favorable seasonal tendencies, we believe the balance of evidence continues to support maintaining a positive outlook toward equities.

We employ a hybrid approach that integrates both a mechanical system and a rules-based system. Our mechanical system leverages proprietary algorithmic indicators, each designed with distinct settings and parameters. Meanwhile, the rules-based system governs how signals are interpreted and adjusted.

Please note that our technical analysis commentary may not always align with the system. Trading signals are strictly generated by the system itself, independent of the commentary. For subscribers who would like to know the schedule of important financial news that may influence the stock market, feel free to view NASDAQ.com's Economic Calendar.

The CNN Fear & Greed Index has declined since last week from 40 to 28, moving deeper into the Fear zone. This deterioration in investor sentiment suggests that market participants have become increasingly cautious despite the market's underlying strength. Historically, periods of elevated fear have often been associated with favorable long-term buying opportunities, as excessive pessimism tends to be more common near market lows than near market tops. While sentiment indicators should never be used in isolation as market timing tools, the current reading reflects a notable lack of optimism and indicates that investors remain skeptical of the market's advance. From a contrarian perspective, the persistence of fear may provide a supportive backdrop for higher prices over time, as significant market tops are more commonly accompanied by widespread enthusiasm and complacency rather than caution and uncertainty.

The VIX has remained relatively stable in recent weeks and is currently hovering near the 19 level. Although volatility briefly increased earlier in the month, investor anxiety has largely subsided, and the absence of any significant spike suggests that market participants remain reasonably comfortable with assuming risk. Historically, VIX readings in this range have been consistent with a generally constructive environment for equities.

While volatility can re-emerge unexpectedly, the VIX continues to reflect a healthy level of caution rather than excessive fear or complacency. As a result, investor sentiment remains supportive of the broader uptrend, reinforcing our favorable outlook toward the stock funds.

Both the Dow Jones Industrials and the Dow Jones Transports continue to trend higher, providing a constructive signal under Dow Theory. Strength in the Transports continues to confirm the advance in the Industrials, suggesting that the broader market uptrend remains healthy and supportive of higher stock prices.

Recent gains in both averages indicate that economically sensitive areas of the market remain resilient. The continued participation of the Transports is particularly encouraging, as it suggests that demand for goods and services remains healthy and that the underlying economy continues to support corporate activity. Historically, sustained advances in both averages have been associated with favorable conditions for equities.

As long as both averages remain in gear with one another and continue to register higher highs and higher lows, Dow Theory remains supportive of a positive intermediate-term outlook. While periodic pullbacks should be expected, the primary trend continues to favor the bulls and argues for maintaining a constructive stance toward the stock funds.

The S&P 500 continues to trend higher over the long term and remains firmly within the secular bull market that began in March 2009. Although the market has experienced numerous cyclical advances and corrections along the way, the primary long-term uptrend remains intact.

More recently, the index retraced toward its rising 200-day moving average before resuming its advance to new all-time highs. Such pullbacks are a normal and healthy feature of ongoing bull markets, often serving to relieve overbought conditions and reset investor sentiment before the next leg higher. The market's ability to recover from periods of weakness and subsequently establish new highs continues to underscore the strength of the underlying trend.

The cyclical advance that began in late 2022 also remains intact, with the broader secular trend continuing to provide an important source of support. Consequently, the long-term technical backdrop remains constructive despite the periodic bouts of volatility that naturally accompany any bull market.

While factors such as monetary policy, geopolitical developments, fiscal uncertainty, and uneven economic growth may contribute to short-term fluctuations, the overall message remains unchanged. The secular bull market persists, and periodic corrections should be viewed as a normal and expected part of the investment process rather than a reason to lose sight of the prevailing long-term trend.

Analysis on the S Fund, I Fund, and F Fund.

S Fund $DWCPF

The S Fund continues to rank among the strongest technical performers within the TSP universe. Following its recent pullback from the upper boundary of the expanding triangle, the fund successfully found support near its rising 50-day moving average before resuming its advance. This favorable reaction confirmed that the intermediate-term uptrend remained intact and that the pullback represented a normal consolidation rather than the beginning of a more significant decline.

Since then, the S Fund has regained momentum and is now trading above both the rising 50-day moving average and the upper boundary of the expanding triangle. This breakout is a constructive development and suggests that the prior consolidation has likely resolved itself to the upside. In addition, relative strength remains favorable, reinforcing the fund's leadership characteristics.

While periods of volatility should always be expected, the fund's strong technical structure, favorable momentum, and relative strength continue to support the potential for additional gains over the intermediate term.

I Fund EFA

The I Fund recently achieved another important milestone by recording a new all-time high, further confirming the strength of its intermediate-term uptrend. Although the fund subsequently experienced a modest pullback, the decline was orderly in nature and successfully found support near the rising 50-day moving average. As a result, the underlying technical structure remains intact, and we view the recent weakness as a normal pause within an ongoing advance rather than the beginning of a more significant correction.

Earlier, the fund generated a bullish signal by breaking above the upper boundary of its symmetrical triangle, suggesting that the consolidation phase had likely resolved itself to the upside. Momentum also improved, with the RSI temporarily breaking above its downtrend line. Although the recent pullback caused the RSI to retreat modestly, there has been no meaningful technical damage, and momentum indicators remain in a favorable position. In fact, the RSI has also found support and appears poised to resume its advance along with prices.

Importantly, both price and momentum continue to exhibit a pattern of higher highs and higher lows, which is characteristic of a healthy uptrend. The rising 50-day moving average continues to provide support, and we believe the recent consolidation has helped alleviate short-term overbought conditions while preparing the foundation for another leg higher.

Despite the likelihood of periodic volatility, the combination of strong relative strength, favorable momentum, and a constructive technical structure suggests that the path of least resistance remains higher over the intermediate term.

F Fund AGG

The F Fund continues to exhibit constructive price behavior and may be in the early stages of breaking out above the upper boundary of the downward-sloping channel that developed following its rejection near the $101 resistance level. Because the trend preceding the formation of the channel was higher, we have consistently viewed the recent decline as a bullish consolidation rather than the beginning of a more significant correction.

Recent price action suggests that buyers are once again gaining the upper hand, and a sustained move above the upper boundary of the channel would strengthen the case that another advance is underway. In effect, the channel may have served to relieve overbought conditions and reset momentum before the next leg higher. As long as prices continue to hold above nearby support levels, the intermediate-term outlook remains favorable.

Although the stock funds continue to offer the strongest combination of momentum, relative strength, and upside potential, the technical outlook for the F Fund has improved noticeably. Consequently, we believe the fund deserves close monitoring in the weeks ahead, as a confirmed breakout would likely signal the resumption of the broader uptrend.