TSP Talk Blog

Stocks opened lower on Tuesday but investors shook off the concerns out of Greece, the indices stabilized and reversed direction, and by mid-afternoon they were in positive territory. The Dow ended the day up 28-points and we saw modest gains in most of the major indices.

Daily TSP Funds Return More returns

The three TSP funds all saw gains of under 0.2% with the C-fund leading and the S-fund trailing. Bonds (F-fund) were hit pretty hard.

The S&P 500 (C-fund) made a 3rd consecutive record closing high on Tuesday. There's still time for this to turn into a failed breakout, but 1 to 3 more closes above resistance would be pretty convincing.


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

The longer-term view shows that the large inverted head and shoulders pattern that we've been watching for month, may have finally broken out. Yes, we have seen two prior failed breakouts, but now we have a pretty solid right shoulder created and that's the difference this time.


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

The Wilshire 4500 (S-fund) has also broken out with some conviction, breaking through several levels of resistance recently.


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

The longer-term chart shows the very clear breakout from the inverted head and shoulders pattern. Upside targets from this breakout could be as high as 1300, or nearly 20%, from the current levels, but often times the breakout will come back to test the breakout area first so it most likely won't be a straight shot.


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



The EFA (EAFE Index / I-fund) tried to fill the gap left open on Friday, but it couldn't quite get the job done. Then there's another gap below that near 62.50 so the EFA will be looking over its shoulder until those get filled. Otherwise, the technical action has gotten dramatically better for the I-fund in February.


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

After 4 days of trying to hold at the 50-day EMA, the AGG (Bonds / F-fund) fell below it and is now facing the double support line near 110. How bad this will be for bonds, we don't know, but as long as stocks are rising, investors will probably move their bond money to stocks.


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



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

Tom Crowley


Posted daily at TSP Talk Market Commentary

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