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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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Stocks were mixed for the shortened light volume trading week. Early selling Monday was a response to the new strain of the corona virus in England that threatens the economic recovery. Dip buyers driven by optimism for 2021came in quickly to erase the majority of the early losses. From Tuesday on the price action was in relatively tight range to finish the week. This was impressive in itself after President Trump sent the covid aid stimulus bill, that finally made its way through congress, back in limbo. This extends the reception of stimulus money by those who need it but could potentially result in more received. Its still unclear what will come of this.

Despite the bumps in the road, investors have remained in stocks for at least the expected Santa Claus rally that historically comes in the final week of December. Small caps (S-fund) actually added to its gains for the week by over 1%. Investors are looking forward to 2021 and don't want to be on the sidelines when the weight of the virus is lifted from the economy. But it would be a mistake to believe that stocks are at low risk. Even if the economy booms like expected for the most optimistic, that tells us nothing about the direction of stocks. The economy and the stock market do not run parallel and there are plenty of examples of where the two run in opposite directions. Stock prices need the promise of growth in the future to rise, not current growth to watch.

Bonds added a small gain while bond investors continue to weight out the economies real risk moving forward. The lack of a stimulus deal being completed helped the bond market as tight investors moved into safety. The I-fund lagged the TSP fund with a 0.63% loss but is still outpacing the C-fund for the month.




Here are the weekly, monthly, and annual TSP fund returns for the week ending December 24:




The SPY (S&P 500 / C-fund) was down for the week but did have the support of the trading channel of more than a month. The price did fall below support and the 20-day EMA on Monday but was short lived and attracted the dip buyers to take the index at a bargain. The index has plenty of room above in the trading channel to make its mark for the Santa Claus rally. The C-fund was down 0.15% for the week.




The Dow Completion Index (S-fund) was down in the first day of the week but found support in its trading channel and reversed into positive territory and on by Tuesday. The index did come off its highs produced Wednesday but the trading range was tight. The S-fund led the TSP funds with a gain of 1.26% for the week.




EFA (EAFE Index / I-fund) gapped down below trend line support and its 20-day EMA. The index did come back above its 20-day EMA but found resistance in the trend line that had been support. The index left an open gap from Tuesday to Wednesday's action. The I-fund lagged the TSP funds with a loss of 0.63%.




BND (Bonds / F-fund) ended on the higher end of its tight trading range. The bond market has grown stagnant with so many things left of the table going forward for the health of the economy. The index spent some time in negative territory Wednesday before gapping up Thursday reach new highs for December. It still remains below the high of November. The F-fund was up 0.13% 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
www.tsptalk.com
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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Comments

  1. Bullitt's Avatar
    Nice work on the daily write ups fellas. This is always a good summary with some nice tidbits you can't find anywhere else.

SPY (C Fund) (delayed)

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EFA (I Fund) (delayed)

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