TSP Talk - Thrift Savings Plan Talk
TSP Talk on Facebook TSP Talk on Twitter

TSP Talk - Thrift Savings Plan Talk

TSP Talk Market Comments TSP AutoTracker Premiums Site Map TSP Funds Forum Returns

Thrift Savings Plan Talk
For Federal Government Employees and Military Personnel

Quotes, Charts, Info

TSP Share Prices & Returns
Fund Index Quotes
Popular Charts
Market Futures Quotes
Earnings Reports
Economic Calendar


Need a back-link...
or want to Advertise?
 

Premium Services

TSP Talk - Thrift Savings Plan Talk

 

Mobile Options


- Android Forum App

- iPhone Forum App

 

 Quick Link to ...
TSP Share Prices | Reader Testimonials

RevShark's TSP Timing Newsletter & Morning Commentary

Intrepid Timer Strategies  |   TSP Talk Plus


Market Commentary

January 21, 2021
 
Archives  |  Current TSP Share Prices
TSP Talk - Thrift Savings Plan Talk
 Today's Commentary         (Not seeing a current commentary?)


Stocks rallied again yesterday with the Dow rallying 260-points and the Nasdaq leading the way with a gain of nearly 2%.  Small caps lagged a bit but still had another solid day.  Bonds were flat, as was the dollar.  The bulls are loving it but the question I keep asking is how many times can the market rally on the stimulus?  It doesn't seem like a real market, but it continues to work.

Daily TSP Funds Return

More returns

 



Stocks were down modestly during the week that Trump was inaugurated in 2017, and they were down sharply the week of, and the day that Obama was sworn in back in 2009.  Perhaps there is no correlation but stocks have been up big so far for Joe Biden's inauguration day, and with two days to go, up sharply for the week.  It may have been in sympathy with the tremendous stimulus that is expected during his first few months in office, but now comes the post-inauguration market where I have been touting a possible sell the news reaction. 

Some of my sell the news inauguration theory was based on prior reactions, and as we talked about yesterday - going back to 1950, so I was a little surprised by the strength yesterday, but today is another day, and we'll see how that theory goes now that the pageantry is over.

After the tremendous run we have seen over the last nine months, stocks that were beaten down have not only come back to where they were before COVID, but have flourished to new highs, and in the case of some of the 2020 biggest winners like Tesla with its P/E (price to earning ratio) at a staggering 1626, or Netflix 96, Amazon 95, Zoom 266, Peloton (inf., negative earnings), they have exploded.

As a whole the trailing P/E ratio of the S&P 500 is just under 40.  That's quite high historically, yet stocks continue to move higher almost every day.  Only before the dot com bubble bursting and the pre-financial crisis did we see a higher P/E ratio.

     



The average P/E/ ratio of the S&P 500 going back to 1950 is 18.24.  The current 38.58 trailing P/E put it in the 97.8 percentile, meaning it's only been priced higher compared to it's earnings, 2.2% of the time. 

          


Perhaps the reason for all of the buying is the projected forward looking P/E being 25.63, and that's because of the expected post COVID growth in 2021, but even that is well above the historical average.

Perhaps 0% interest rates and unlimited stimulus can keep the market rising beyond normal valuations, but it is also going to continue to beat down the dollar.  I don't know how long this game can be played, but I want in.  I just need a meaningful pullback to buy... is that too much to ask?
 

The S&P 500 (C-fund) was up big again yesterday, adding more icing to the late 2020 rally.  This one has lasted almost three months now, but even in a year like 2020, when stocks raced off those March lows, there were meaningful pullbacks for those who waited.

                    


The market always looks the best near its tops.  Not that we know when a top will be put in, but severe declines can manifest from what look like invincible charts.  Here are two charts, one from 2020 and the other 2018, where we saw explosive rallies into January, and what eventually occurred.  We did get a little bit of a warning on these as we saw some of the trading channels break before the major damage was done.

           


In the case of the high flying DWCPF (small caps / S-fund) we did already see one of those channels break (blue dashed support line), and like the 2020 chart above, it ran back up to test the bottom of that old broken support line before failing and dropping down sharply again. 

         
 

BND (bonds / F-fund) remains in a tight range, perhaps coiling up for its next big move.  The open gap may be indicating that it may want to move higher.

        


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

For more info our other premium services, please go here... www.tsptalk.com/premiums.html

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

Tom Crowley


Like what you're seeing on TSP Talk?  Why not Tell a Friend about us?  We'd really appreciate it, and they may too. 

Thanks!

 
Chart provided courtesy of www.sentimentrader.com
 
Market Commentary Archive


Commentary Archives
 

Have questions? Visit our message board for answers.

Would you like to be on our email alert list? Your email address will never be given out. Please read our privacy policy. By signing up you agree to the TSP Talk Terms of Service.

Like what you're reading? Please Tell a Friend about us.

Help and Resources

Site Map
FAQ
FAQ - Premium Services
FAQ for Alerts
Reader Testimonials
How to Make a Transfer
How to Make an IFT (Video)
Report Problems / Errors
Contact Us

TSP - What is it?
Who Is TSP Talk?
What Can We Do For You?
Want More Help?

Mug Shots

TSP Talk User Map
Tell a friend or co-worker
Recent Forum Activity
Video & Image Library
Market Analysis Videos
TSP.gov Home Page
GovLoop
My Federal Retirement
FERS Guide

Mobile Options
- TSP Talk Forum Apps

 

Keep Me Informed

Enter e-mail Address:
For Email Marketing you can trust

[more info ]
How to get on the list!

 
SPY (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes

TSP Talk is not a Registered Investment Advisor. TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.  The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com.

TSP Talk is in no way affiliated with the U.S. government, or military Thrift Savings Plan, tsp.gov, or any other government agency. TSP Talk does not guarantee the accuracy or completeness of this report, nor does tsptalk.com® assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.

Full Disclaimer

Copyright ® 2003 - 2021
Buy Low Sell High, Inc.
TSPtalk.com ® is a trademark of Buy Low Sell High, Inc.
All Rights Reserved

Buy Low Sell High, Inc., 221 N. Washington Blvd #13213, Ogden UT 84412


TSP Talk Market Comments TSP AutoTracker Premiums Site Map TSP Funds Forum Returns