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TSP Talk Weekly Wrap Up

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The new week started with selling and ended with more selling. The previous Friday's sell-off continued into Monday to start stock indices in negative territory for the week. The bulls did fight back mid-week providing mostly directionless choppy action but a strong move higher on Thursday erased most of the C-funds weekly losses and pushed the S-fund into positive territory for the week. This was a result of wishful speculation that Jerome Powell would be accommodative to the market and celebrate the recent decrease in inflation during his speech in Jackson Hole Friday. Investors were wrong. Jerome Powell was a matter of fact about the battle with inflation and warned the efforts to control it will likely have negative impacts on the economy. The reaction was a deep single day sell-off. Both the C and S-fund lost more than 3% on Friday. The C-fund even slipped into negative territory for the month of August.

The dip the market experienced mid-August was hoped to be a buying opportunity, but instead it seems likely to be a sustained downfall. The bulls have shown life over the last couple weeks, but they eventually get overpowered by the bears. Investors now face jobs, inflation, and other economic data between now and the FOMC meeting in the later part of September. The other side of the coin is the thought that Friday was an emotional sell-off that pushed the indices down at an unreasonable rate. If this holds then dip buyers will at least help to sustain a price range rather than let sellers push the market back toward its lows.

There was nowhere safe to hide outside of the G-fund. The F-fund suffered a 0.35% loss but was off its lows for the week where it was down 0.80% at the end of Wednesday.

The August Jobs Report will come out Friday and that will be of great importance to investors. The labor market was mentioned in Powell's speech as a double-sided sword that if softened will suppress inflation, but its effects will be felt by American families. But right now, it is hard to say how the market would react to a strong jobs report; it would show a resiliency in the U.S. economy but may open the door for the Fed to raise rates a bit higher at the end of the month.

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Here are the weekly, monthly, and annual TSP fund returns for the week ending August 26:

SPY (S&P 500 / C-fund) opened a gap to start the week and could not quite close it during the gains on Thursday. The EFT sold off Friday at a rate not week in some time but most remarkable was the failed support by the 50-day EMA. The price did not slip far past the moving average, but it was enough to discredit it as support. The C-fund lagged the TSP funds this week with a loss of 4.02% where most of the damage came from a 3.37% loss on Friday.

The Dow Completion Index (S-fund) did two things differently. The index did fill the gap produced from Monday's gap down and it remained above its 50-day EMA. The S-fund went into Friday with a slight gain for the week and also fell to a lesser degree than the C-fund, so the S-fund ended the week with just a 2.75% loss, not great but outperformed the TSP stock funds.

EFA (EAFE Index / I-fund) filled the open gap but was already below its 20 and 50-day EMAs and the moving averages seemed to hold as resistance. EFA was affected by Friday's sell-off as well but kept its losses under 3% for the day. Still the I-fund accumulated a 3.01% loss for the week to fall between the C and S-fund performances.

BND (Bonds / F-fund) found a low Wednesday that we could see as a support trend line for a falling trading channel. The F-fund erased more than half of its losses for the week in between Thursday's gains and Friday's losses. The is an open gap above but the 20-day and 50-day EMA as well as a falling trend line would need to be passed to fill it. The F-fund 0.35% 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
Last Look Report
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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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  1. FireWeatherMet's Avatar
    Nice summation

S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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