TSP Talk

Market Comments

TSP Tracker

Premiums

Site Map

TSP Funds

Message Board

Returns

Today's Commentary           Not seeing a current commentary?                Printer friendly

Trend positive - seasonality negative Stocks rally on Friday closing another positive month for the stock market.  The Dow gained 47-points on Friday.                                     For the TSP, the C-fund gained 0.23% on Friday, the S-fund was up 0.39%, the I-fund picked up 0.32%, and the F-fund (bonds) gained 0.11%.  For more on the weekly and monthly returns, please see our TSP Weekly Wrap-Up. April's gains make it 8 consecutive positive months for our TSP U.S. stock funds. The I-fund had a couple of negative months during that period. The S&P 500 is in the middle of a long-term positive trend and recently broke out above the prior highs.  The head & shoulders breakout above the neckline has held for 4-day now, and assuming it holds, we have an upside target near 1420.                                                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The indices are getting over extended but it's tough to fight this action, particularly with the dollar plummeting and adding fuel to rally.  Should the dollar decide to rebound and test the upper end of its descending trading channel, we could see stocks pull back some.                                                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk If we are going to see a break from this positive trend in stocks, it could be because the negative seasonality that we are heading into.  The phrase "Sell in May and go away" is always thrown out this time of year, but does it have any merit? Since 1950, nearly all of the gains in the S&P 500 have been accumulated during the months of November through April.  On average the S&P 500 has done very little during those 60+ years during May through October.                                                                               Source: mebaneferaber.com Of course there are exception years when the market did well between May and October, and seasonality shouldn't generally be used as a primary indicator, but fighting seasonality is like riding a bike into a still breeze.  It gets a little more difficult.  It's much easier to ride with the wind at your back. The TSP Talk Sentiment Survey gave a neutral reading last week and the 1.83 to 1 bulls (55%) to bears (30%) ratio will keep the system's allocation at 100% S-fund for this week. The futures shot up last night (Dow futures were up 106 at one point) after the news of the death of bin Laden was released.  These emotional moves tend to reverse quickly so let's see how the day plays out.  Much gratitude and congratulations go out to our brave military forces who were a part of this mission. Thanks for reading!  We'll see you back here tomorrow.   Click here to discuss today's Market Commentary Tom Crowley

TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.  The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com.