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TSP Talk Weekly Wrap Up

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The new quarter brought a new character to the market. Coming off a rise in interest rates from the Fed, economic data poured in suggesting a continuation of strong growth in the U.S. economy which gives the Federal Reserve more reason to keep raising rates. This triggered selling in small caps, large caps, and bonds. The bears took control of small caps (S-fund) right away for the first week of the 3rd quarter while large caps (C-fund) benefited from the rotation. Next to go was the bonds market (F-fund) that started to slip Wednesday after a spike in yields that resulted from strong September economic data. Finally big names were unable to hold up large cap indices and we saw a pull back in the Dow and S&P.

Now we question whether this is the end of the pull-back or if there is more to come. Dip buyers did come in late Friday but did little to the overall damage. Earnings season is coming up so investors may be more comfortable sitting on the sideline until good earnings give everyone a chance to jump in at once. The other side of the coin is that traders may be ready to jump on any fresh lows.

The S-fund took the greatest loss this week (-3.22%) as its sell-off started early and never really stopped. The I-fund gave back most of its gains from September as it fell 2.33% for the week. The F and C-fund were both down just under 1% for the week.

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

The SPY (S&P 500 / C-fund) reached its September highs Wednesday but sold-off Thursday and Friday bouncing off its 50-day EMA in the process. We may see another test of the 50-day EMA for support before any real buying starts up again. The C-fund was down 0.95% for the week.

The Dow Completion Index (S-fund) fell early this week and fell sharp. The index dropped down to just above its 200-day EMA before dip buyers showed up just before the close on Friday. This both seems like a good time to buy a lower priced fund but it is also a bit concerning to see a technical breakdown that could still be unwinding. The S-fund fell 3.22% for the week to lag the TSP funds.

EFA (EAFE Index / I-fund) also fell sharply to give back the gains of September. A couple of open gaps were closed from last month but two new gaps were opened. The index has been seesawing the last couple months so we will see if that pattern will continue and the index can bounce back. The I-fund was down 2.33% for the week.

AGG (Bonds / F-fund) fell sharply Wednesday but remained within the falling trading channel established when the index turned around in August. The sharp fall continued and the index fell below falling support and down to close an open gap from May by the end of the week. The F-fund was down 0.94% 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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SPY (C Fund) (delayed)

( Real-time)
DWCPF (S Fund) (delayed)

( Real-time)
EFA (I Fund) (delayed)

( Real-time)
AGG (F Fund) (delayed)

( Real-time)