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TSP Talk Weekly Wrap Up

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Stocks end 2019 with best gains since 2013, gains for the new year, and a loss for the week. On Monday light volume profit taking pushed stock indices into negative territory for the week. Stocks eventually rallied into the new year and started the year off with gains putting the week back in the green. However Friday's missile attack which killed a high profile Iranian militant leader added instability to the economic and political framework. Naturally the potential consequences of this action frightened investors and stocks sold off. Dip buyers showed their dominance over the bears once again the losses were kept at bay but prices eventually settled in negative territory for the week.

A driving force for stocks in the last couple months of 2019 was a drop in uncertainty. The ease was brought by a phase one deal with China, the election in the UK where the winning candidate is expected to put an end to Brexit sooner than later, and the long term dovish tone of the Federal Reserve on interest rate plans. Now a strike on Iranian militant leaders adds unwanted tensions to the investor world. What are the potential outcomes of this action? Whatever it may be, its a tough spot to be for investors with stock valuations already overextended and geopolitical matters threatening to take down the house of cards.

The bullish side is that didn't happen Friday. The news was worthy enough to spark the sell-off bears have been warning about throughout all of 2019. Rather dip buyers came in and bought despite the obvious warning signs. Momentum has been strong over the last couple months and there is room for a pullback without significant technical damage on stock indices. A pullback would actually be good for market players looking for a cheaper entry point. But after all the dooms day claims that was followed by a year with more than a 30% gain in the C-fund its hard to imagine what can take down this market.

TSP stock indices were all down slightly with the C-fund lagging with a loss of 0.12%. Bonds rallied on Friday's news of new tension between the U.S. and Iran. Nearly all of the F-fund's gains for the week were added Friday. The F-fund was up 0.4% to lead the TSP funds.

Here are the weekly, monthly, and annual TSP fund returns for the week ending January 3rd:

Here are the monthly TSP fund returns for the month of December:

The SPY (S&P 500 / C-fund) picked up volatility and flattened out compared to most of December. The action this week kept the index in the trading channel of December. Support kept the index from filling an open gap from December but was enough for dip buyers to jump in and keep losses about as low as the open. The 20 and 50-day EMAs are also potential support for the index if tested. The C-fund lagged the TSP funds for the week with a loss of 0.12%.

The Dow Completion Indices (S-fund) was not impacted as much as large caps on Friday and losses were kept to near flat for the week. The 20-day EMA held as support during the geopolitical tension reaction. The index is extended but has room to create entry points without jeopardizing technical health drastically. The S-fund fell just 0.02% for the week.

EFA (EAFE Index /I-fund) also gave up less than large caps on the Friday sell off. The end result did put the index into negative territory for the week. Momentum is still on the rise but there is room to fall before trading channels are broken. The I-fund was down 0.02% for the week.

AGG (Bonds / F-fund) jumped around for the week but mostly remaining unchanged until Friday. The missile attack had many running for safety positions in case this turned into the worst. AGG hit its highs at resistance formed from the last two peaks. The highs of September were not met but are not out of reach. The F-fund rallied 0.39% Friday to give it a 0.4% gain for the week leading the TSP funds.

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: 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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