TSP Talk Blog

Stocks opened at their highs of the week this past Monday, and closed at their lows on Friday. It was the worst week for stocks in about 2 1/2 years and the blame is going to the precipitous decline in the price of oil, and the lack of demand is indicating a possible global economic slowdown.



Here are the weekly, monthly, and annual TSP fund returns for the week ending December 12:




The SPY (S&P 500 / C-fund) finally produced the long awaiting "Right Shoulder" that we have been anticipating for weeks.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


The right shoulder (RS) doesn't necessarily have to be the same size at the left shoulder (LS), and more often than not it is not, but a clean inverted H&S makes the technical analysis a little easier. So the pullback was the bad news for the bears, but the good news is, the longer-term outlook of an inverted head and shoulders pattern is a breakout to the upside.



The inverted head and shoulders pattern on the Wilshire 4500 (S-fund) is a lot more traditional in that the neckline is horizontal.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


The price of oil has been plummeting since the highs earlier this year. It's down over 40% from those highs, and that's not just market volatility. That's a trend that means something and the stock market is interpreting it as an economic slowdown.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


The EFA (I-fund) has been in a bear market, and while it was showing signs of life in October and November, the downside trend is intact and descending resistance held. When in a bear market we should anticipate bearish results, and that's what we got. The U.S. economy seems to be doing better, but this suggests the European economy may be at risk.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


The AGG (Bonds / F-fund) benefited from the sell-off in stocks as investors opted to throw money into bonds. Friday's close was the highest close ever for the AGG. The yield on the 10-year Treasury, which goes down when bond prices go up, closed at its second lowest level of the year at 2.1%.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


Good luck and thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk Market Commentary. If you need more help deciding what to do with your account, perhaps one of our premium services can help.

Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
Facebook | Twitter


The legal stuff: This information is for educational purposes only! This is not advice or are commendation. 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.