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TSP Talk Weekly Wrap Up

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A lot went on last week for the market and each index reacted in its own way. Large caps stalled but weren't sold, small caps were up as usual, while bonds recovered from poor technical positioning. The associated TSP funds were all in the green for the week but at different degrees. Only the I-fund found itself in negative territory as the European Central Bank was unable to impress investors with their inaction on interest rates.

The Federal Open Market Committee raised interest rates by a quarter percent this week in the U.S. while also signaling a greater likelihood of two more rate hikes this year. Traders may have sold off intaday gains Wednesday but rate hike along with the hawkish tone did not drag down the argubly overbought stock indices. We did see an early sell-off Friday as tarriff plans were finally materialized by the U.S. and China but traders were quickly back to buying to earse the early losses and even pushed large caps up to a slight gain for the week.

There seemed to be a few potential catalyst to really put the selling pressure on stocks but instead all we really saw was a slow down in momentum. This week may mark the highs of the month for large caps or we could have similar action we saw coming into the month where the buyers stepped in when the sellers didn't after things slowed down at the end of May. The pull back scenario seems more likely to me but the market doesn't care to make sense sometimes. The bullish argument is the U.S. economy is hot right now and investors have some spending power.

Here are the weekly, monthly, and annual TSP fund returns for the week ending June 15th:

There has been a pattern in the SPY (S&P 500 / C-fund) that previous three months where the index will reach its highs in the middle of the month. Looking at where the chart is now it seems likely that will be the case for the fourth month in a row. The index had early success for the first half of June and even reached the highs of March. Now investors may question if they should take the profits of the early summer and put it in the bank. The C-fund produced a slight gain of 0.07% for the week.

The Dow Completion Index (S-fund) had less friction this week compared to large caps and led the TSP funds with a gain of 0.51%. There may be risisng resistance that the index ran into this week but that is coupled with rising support below. If the index could test the 20-day EMA as support next week and holds to that price, that would be an attractive entry point.

EFA (EAFE Index / I-fund) was danceing around its 50-day EMA for most the week while avoiding filling the open gap above. The index sold off Friday but came off the lows producing another open gap. This was a reaction by the ECB not touching interest rates. Now will we see another test of the 200-day EMA? The I-fund lagged the TSP funds with the only loss for the week as it was down 0.48%.

AGG (Bonds / F-fund) filled one of two open gaps from the May rally but instead of filling the second the index rallied back above its 20 and 50-day EMAs to end the week. This index has had strange inconsistent action lately. Good or bad, thats hard to put your money on when you're thinking long-term. 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
Weekly Wrap-Ups Archive
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The legal stuff:/font> 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)