TSP Talk Blog

Happy New Year, everyone! We start a new year with some negative momentum, but the holiday trading was light and may or may not be an indication of the current market conditions. A new year can start with a bang but the direction is anyone's guess this year.

The Dow lost 179-points on the last trading day in 2015 cementing losing years for both the Dow and the S&P 500, although the C-fund, which tracks the S&P 500, managed a 1.46% gain.

Daily TSP Funds Return More returns

Here are the final monthly TSP Fund returns for December and the annual returns for 2015.



The safe G-fund ended as the top gainer for the year, and the S-fund ended as the biggest loser with a loss of nearly 3%.

So, how did you do in 2015? Click on this link to see the final returns of our members of the 2015 AutoTracker...

Here's how our four Premium Services did compared to the 5 main TSP Funds:



I'm quite proud to see all of the services beating the returns of all of the TSP stock funds and the benchmark S&P 500 Index, which lost 0.73% for the year. Our tongue in cheek slogan / motto here is, "Friends don't let friends buy and hold" and last year was an example of why. During a very positive year its difficult to beat the market averages and systems can underperform when they get overly cautious during strong bull market runs. But the plan is to make it up by avoiding losses and outperforming during flat and negative years so that in the long run they outperform the buy and holder who is at the mercy of the stock market. It's easier said than done, but that's the goal and we succeeded in 2015.

Now, onto 2016! After a flat year stocks tend to bounce-back the following year, at least that has been true over the last 25 years. These are based on the returns of the C-fund (S&P 500 fund) where the return was less than +3.5% and more than -3.5%.



January, and in particular the early part of January, can often times be a good indicator of how the year is going to go. In 2015 the S&P 500 was down 3% in January and the year ended down. How one year ends is not always a good indicator of how the new year will begin so we could get some answer within the first few days of trading this year of how 2016 may play out.

The SPY (S&P 500 / C-Fund) pulled back during the final two trading days in 2015 and potentially forming another lower high on the chart. That wouldn't be official unless we see a lower low as well, because until that happens, it's just a dip in the short-term uptrend. The intermediate-term (since the early November peak) has been down, but that may have been the start of a large bull flag forming. We shall see.


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

This weekly chart of the S&P 500 shows that bull flag so the negative short-term trend is going to be battling the stronger intermediate-term patterns in early 2016.


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

The longer-term picture looks a little worrisome as we may be watching a large rounded top forming. So it will be very important for that big bull flag to break to the upside, which would negate this rounded top theory.


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

Being a presidential election year, we will see and hear a lot of comparisons to prior election years. This chart from chartoftheday.com shows that the returns during an election year average, going back to 1900, are slightly better than an average year. It shows there can be some turbulence in the first half of the year but as we approach Election Day, things get much more bullish.



During the two most recent election years it has gone both ways with 2008 obviously being a disaster for stocks.



The Dow Completion Index (small caps / S-Fund) starts the year in vulnerable technical shape and it will need a lot of help to break the downtrend and bear market that it has been in. The 200-day EMA, and more recently the 50-day EMA, have been acting as strong resistance since the August breakdown. It is currently in a bear flag and really needs to break back above the 50-day EMA or things could get ugly for the small caps again.


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

The EFA (EAFE Index / I-fund) has its own problems and is also shows a possible 2nd lower high forming. It nearly filled the open gap near 58.60 and will look for support at the bottom of that gap, but the rising wedge formation is generally considered bearish.


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

The AGG (Bonds / F-Fund) was up on the last trading day of the year as stocks pulled back, but it is still struggling below the 50-day EMA. Just as stocks can start the year with a bang, the first week of trading for bonds can also dictate how the year goes.


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

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
Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


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.