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TSP Talk Weekly Wrap Up

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The S&P 500 fell for the third week in a row as negative trade headlines and global economic fears continue to have investors retreating. Most notable this week was the gap down into Thursday which solidified another win for the bears. Stocks did end the week with a slight gain on Friday to which credit was given to the bulls for remaining optimistic; but its more likely traders are opportunistic rather than optimistic. The gap down into Thursday was a short-term buying opportunity that any investor who follows charts could see. Stocks have been trending down in May and volume is light. Not ideal for long-term buyers.

How much further do stocks need to fall before its another buying opportunity for long-term investors? Large caps (C-fund) have more room to fall before testing the 200-day EMA price but small caps (S-fund) did just that this week and fell below unable to correct right away. The trade dispute was the spark to the end this years relentless climb so it may not be a price but a headline that give buyers life again.

There is un-invested cash in investors hands waiting for somewhere promising. Bonds have been that place for some lately. The F-fund closed under its highs for the week but outperformed the TSP funds with a gain of 0.27% while all the TSP stock funds were down.

The TSP will be closed Monday in respect for Memorial Day. Enjoy the long weekend.




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




The SPY (S&P 500 / C-fund) opened below its 50-day EMA it has been jumping between the last couple weeks. The index moved above it again before gapping down Thursday. The open gap was partially filled Friday morning but flattened out for the remaining trading hours leaving the gap open over the long weekend. The top of the gap is also the 50-day EMA so the quick buying opportunity may turn into a quick selling opportunity without good trade news to back it. The C-fund was down 1.14% for the week.




The Dow Completion Index (S-fund) also gapped down but opened at its 200-day EMA and fell further unable to trade above that moving average for the last trading days of the week The index is in a steep downward trend. The lows of March are the next line of defense to attract buyers. Small caps are less affected by the trade issues so the underperformance may be due to underlying problems in the index. The S-fund fell 1.42% for the week.




EFA (EAFE Index /I-fund) gapped down Thursday but unlike U.S. indices it jumped back above the open gap Friday. That leaves an open gap still open but put the index back above its 200-day EMA and keep its losses under 1% for the week. The I-fund lost 0.49% for the week.




AGG (Bonds / F-fund) moved higher this week as investor retreated stocks. The gains were capped off at the top of a trading channel and some cash moved back into equities Friday. The F-fund gained 0.27% 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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SPY (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
AGG (F Fund) (delayed)

(Stockcharts.com Real-time)