TommyIV's TSP Talk Blog

We've talked before about the uncertainty of this year's election that has created timid traders and investors the last couple of months as the election approached. That uncertainty wore off Monday as a rally was attributed to the increased probability of a Clinton win after the FBI dropped her e-mail case again. This meant a familiar market for traders as you would expect more of the status quo that we've seen from the past eight years with Obama in office if Clinton won. It was logically predicted from most that a Clinton win would spark a rally come Wednesday while an upset win from Trump would induce a sell-off in stocks.

Nobody expected the rally Wednesday that followed the confirmation that Trump, the unlikely candidate, had won the election especially after the shock wave of selling the news initially triggered in the futures Tuesday night and Wednesday morning. The unexpected action is hard to analyze because it could have been emotional trading that has little backbone to continue, or investors could be betting on a new market under the promised policies of a Trump administration and a congress with the Republican majority. The action calmed down by Friday but the week concluded with big gains from the C and S-fund and the Dow Jones Industrial Average's largest weekly gain in five years.

The S-fund outperformed with more than a 5% gain for the week but a sell-off in bonds left the F-fund with a 1.48% loss.




Here are the weekly, monthly, and annual TSP fund returns for the week ending November 10th:




The SPY (S&P 500 / C-fund) gapped up Monday leaving an open gap below as the pre-election rally took off Monday morning. This week's high were right around the August highs so resistance could have held despite the emotional buying. A correction is plausible if profit taking takes place this coming week which would allow the closing of that open gap. If the index retest that overhead resistance next week and can get above it than it can be safe to say we are now in a new market. The C-fund had a 4.02% gain this week.




The Dow Completion Index (S-fund) led this week's action but it too left an open gap behind. This index did not have any obvious resistance to hold back action which allowed the index to close near its highs for the week. The S-fund ended the week with a 5.38% gain.




EFA (EAFE Index / I-fund) started the week off with a gap up too but the resistance of the top of a declining trading channel and the negative effect the Trump win had on other global markets left the I-fund behind as the US stock funds rallied. EFA did close that open gap and ended the week with a gain of 0.44%.




AGG (Bonds / F-fund) sold off and gapped down following the Trump victory and the rally in stocks. That sell-off continued for the rest of the week and bond closed below the 200-day EMA all three days. A new open gap was opened above which overlaps an open gap from June. The F-fund was down 1.48% for the week.




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.


Tommy Crowley
www.tsptalk.com
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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.