TommyIV's TSP Talk Blog

Stocks had their greatest single day loss of the year Monday after trade disputes continued over the weekend, but prices climbed out of the early hole throughout the week to minimize the damage. The price of the Chinese Yuan to the dollar has been the primary driver for market action this week. The price of the Yuan fell sharply Monday and stocks followed. President Trump accused the Chinese of manipulating their currency to add fears to investors of the tactics the governments will use to win the trade war at the cost of global economic growth. The Yuan stabilized for the rest of the week making Monday's action a buying opportunity in some inventors eyes but there was heavy technical damage to stock indices.

Volatility was high this week which makes sense with the combination of trade problems and the usual low volume trading of August. The stock indices will be battling moving averages to regain the damage since the previous Thursday when Trump threatened additional tariffs on China. Volatility will likely be high until inventors believe real resolutions are made on the trade war.

Bonds had another week of gains but peaked early this week once the Yuan stabilized and traders moved back to stocks. The F-fund led the TSP funds this week with a gain of 0.58% while the all the TSP stock funds suffered losses with the I-fund lagging (-1.14).




Here are the weekly, monthly, and annual TSP fund returns for the week ending August 9th:




The SPY (S&P 500 / C-fund) gapped down Monday and continued to fall intraday before hitting the 200-day EMA to make its lows for the week. The index was able to fill the open gap left open on Monday when stocks rallied Wednesday through Thursday. The index could not close above its 50-day EMA for the week so the moving average could be technical trouble for the index as we move forward. The C-fund was down 0.4% for the week.




The Dow Completion Index (S-fund) fell below its 200-day EMA but was able to move back above it on Thursday's rally. The 50-day EMA marked the highs for the week Thursday and the index pulled back Friday reproaching its 200-day EMA and the open gap created from Wednesday to Thursday. The S-fund was down 0.59% for the week.




EFA (EAFE Index /I-fund) gapped down early in the week leading it to fill an open gap left open from early June. The index regained traction Thursday and was able to fill the open gap left open Monday. The index currently trades below its 200-day EMA and did not test it for resistance this week. The I-fund lagged the TSP funds with a loss of 1.14%.




AGG (Bonds / F-fund) climbed steadily for the first half of the week as investors continued to retreat to less risky assets such as bonds. The index pulled back from its early gains as the Yuan situation stabilized and investors began to see the sell-off in stocks as a buying opportunity. A gap was left open from Monday's open. The F-fund led the TSP funds with a gain of 0.58% 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
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