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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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The S&P 500 (C-fund) was down everyday of this short week and concluded its fifth straight day of losses on Friday. The S-fund escaped the same statistic with a 0.01% gain on Thursday, however the fund lagged on the three other days for a cumulative greater loss for the week. The I-fund showed strength where the U.S. stock funds could not but was still a victim of this week's sell-off. Index price struggled all week but there were instances of buyers showing some presence but, in the case of Thursday and Friday, was followed by intraday sell-offs. Signs of life in buyers vanished in the final trading hours of the week pushing all stock indices to close at a low for the week.

Bonds (F-fund) made some moves this week but the net result was an even break at a 0.01% gain.

The lack of reasons to buy have been countered with reason to raise cash. Indices grew beyond technical restraints the previous week and in the case of the TSP stock funds, reached new all time highs. The selling began following last Friday's release of the August jobs report and from there indices lost their grip and gave up the impressive climb to new highs. The question is whether this is a time to buy before stocks make their usual ascend following a dip or if the selling will be sustained. I'm not talking a major sell-off like last February but an end to the relentless climb. We have the delta -variant of Covid-19 taking its toll on the economy, inflation continues to rise which puts pressure on profit margins, and the Fed has stood by their plan to begin tapering this year.

These are just a few reasons of many to be pessimistic about stocks particularly in a typical slow season, but stocks have continued to be atypical and have come back from every other dip prior. A more bullish side of the coin is the technical support that the indices have accumulated, the excess amount of cash that can find its way back to stocks when there is no better option, and the growing number of vaccinations that are thought to eventually take the economy towards normalcy.

The conclusion is not to be discouraged or confused by the markets when but to put your swing trader hat on and stay on top of the trends.

Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the auto tracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.

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

The SPY (S&P 500 / C-fund) made its way back below the resistance line it had broke through the previous week. Five straight days of losses brought the index back within the heart of its trading channel but it was the sell-off late Friday that put the index to the support line of that trading channel. This line of support is backed up by the 50-day EMA. Momentum will have to continue to push this index down much further but for now its looking like a typical monthly dip that provides buying opportunity. A test of the 50-day EMA will give a better sense but it didn't take a test of the 50-day EMA in August's pull back for the buyers to jump back in. The C-fund was down 1.68% for the week.

The Dow Completion Index (S-fund) did make its way down to test the 50-day EMA which was painful for those invested but could be an entry point for those who see the index as oversold. However the 50-day has not been the buyers friend like seen in SPY and there are two open gaps below one of which is below the 20-day EMA. The hard pull back and quick rebounds have made this fund a swing trader's golden goose. The S-fund lagged the TSP funds this week with a 2.57% loss.

EFA (EAFE Index / I-fund) has began to get the attention of more autotracker members especially during its climb to new highs the previous week. But its appeal this week was composure during the sell-offs of the U.S. stock funds. The chart is covered with open gaps but that is typical of this index due to open market time differences. The index did fall back below the June high and made its way into an open gap but also has formed a bull flag which tend to breakout to the upside. The I-fund was down 0.83% for the week.

BND (Bonds / F-fund) gapped down to start the week and fell below a trend line in the process and closed below its 50-day EMA. Not a good start to the week but the index recovered quickly and even made its way to the top of its month long trading channel and into positive territory for the week. But the index fell from there and eventually closed the week at its 20-day EMA where it ended the previous week. The F-fund gained 0.01% and was outperformed by the G-fund's 0.03% gain.

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
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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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