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TSP Talk Weekly Wrap Up

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The Stock market rally continues to be relentless as more buyers came out for the new year to join the fun. Indices like the S&P 500 and the Dow Jones Industrial Average produced their best first week in more than a decade. As the last week of 2017 slowed down a bit, stock analysts questioned if the momentum of 2017 would continue into 2018. So far that momentum has accelerated.

There doesn't seem to be one thing that keeps these markets going but the main issue is the expectations of the impact of the corporate tax cuts, which of course should positively affect earnings, and also how corporations will make use of the extra cash from those cuts. We also have new leadership in the Fed so there may be some speculation into what will be the greatest influence in rate hike decisions this year.

The December jobs report came out Friday which fell short of expectations: 148,000 jobs added after a prediction of 180,000. This had little affect on stocks because, aside from that number, wage improvement looked solid. We will watch closely over these next few weeks to see what matters to investors this year.

The C-fund outperformed this week with a gain of 2.63%. The I-fund was not far behind with a gain of 2.44%. The F-fund was the only TSP fund down for the week with a 0.3% loss.

Here are the weekly, monthly, and annual TSP fund returns for the week ending January 5th:

The SPY (S&P 500 / C-fund) pressed back above old support it fell below last week and continued to surpass a four month long resistance trend line. The move gives confidence to traders who now see strength in the index. More traders are looking for entry points and right now the index is at a new high but did so with resistance. The C-fund was up 2.63% for the week.

The Wilshire 4500 Completion Index (S-fund) did not have the strength seen in the S&P 500 and was limited by rising support. The index did produce gains but lagged both The C and I-funds by more than 0.5%. The index did break above a short-term flat resistance line. The S-fund was up 1.71% for the week.

$IEE (EAFE Index / I-fund) gapped up the last two days of the week as the dollar fell. The first gap up put the index above long-term resistance. The new open gaps do give traders a chance to take some profit early this year. The I-fund was up 2.44% for the week.

AGG (Bonds / F-fund) spent the week falling down to below both the 20 and 50-day EMAs. Those who took safety in bonds from stocks at the slow end of 2017 made the move back to stocks once things looked promising. The index did test support and it held. The open gap from September is also now within its trading channel so that will attract buyers expecting to be filled. The F-fund was down 0.3% 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.

Thomas A Crowley
Weekly Wrap-Ups Archive
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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.

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S&P 500 (C Fund)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)