TommyIV's TSP Talk Blog

Trade war tensions had their greatest effect yet on stocks this week as things heated up a bit more between the two largest economies in the world. Stocks took the greatest heat on Monday with a gap down and more than a 1% loss across indices. For the rest of the week large cap stocks jumped around without recovering those early losses but also the selling pressure did not persist either. More selling continued intraweek for small cap stocks which have been the outperformers until recently.

Friday concluded the second quarter of 2018 so some of the action could be credited to portfolio cushioning done by money managers. This means there will be a mindset shift going into Monday to start a new quarter where buying laggards could be the mindset. This week's action was a bit ugly but the lows held and we are now heading into positive seasonality with Independence Day next week.

The F-fund outperformed the TSP fund with a gain of 0.35% for the week as investors moved into bonds with the tensions in stocks. The S-fund lagged the TSP funds with a loss of 2.19% for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending June 29th:




The SPY (S&P 500 / C-fund) broke down below rising support on Monday leaving an open gap behind which the index could not fill as the week went on. This move took away a more bullish technical advantage we were beginning to see in this index. After matching the highs of March in mid-June, the SPY could not attract more buyers and a good amount of the early gains were given back as the month wrapped up. The index danced around its 20 and 50-day EMAs this week which could keep values from falling down to the 200-day EMA for now and possibly until this index can try to test the highs of June again. The C-fund fell 1.31% on the week but kept a 0.61% gain for June.




The Dow Completion Index (S-fund) displayed some weakness this week which was unseen since action in April. The index fell below the support of a rising trading channel and continued to fall until reaching its 50-day EMA where it bounced back some. The support of the 50-day EMA is coupled with the highs of March to add to support so if traders still have hope in these stocks, this may be a buying opportunity. The S-fund was down 2.19 % for the week to lag the other TSP funds but despite the loss it ended June with a gain of 0.86% to outperform the other TSP funds.




EFA (EAFE Index / I-fund) could not get back above its 200-day EMA after ending the prior week just below its price. Instead the index gapped down Monday and continued to lose value for the rest of the week before reclaiming some losses on a gap up on Friday. The trend has been down for this index since mid-June but investors are hoping a the quarter will turn the sentiment around. The I-fund was down 1.05% this week to cap the losses of June to 1.2%.




AGG (Bonds / F-fund) outperformed the TSP funds this week as traders moved to bonds to escape the problem in equities. The index gapped up Wednesday and even spent some time intraday Friday back above its 200-day EMA before retreating to the trend line to end the week. The F-fund did add 0.35% to its value this week erasing a majority of the early June losses to end the month down 0.1%.




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 the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.


Thomas A Crowley
www.tsptalk.com
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