TommyIV's TSP Talk Blog

Cash remains king as market turmoil continues. Selling remains aggressive and even got worse this week for U.S. stocks. The detrimental economic effect of the coronavirus outbreak is rippling through the states and the markets continue to express it. More states are beginning to mandate nonessential businesses to close, jobs have been lost, and many struggle to find a way to pay their debts. The necessity then becomes to access cash and we are seeing that cash leave stocks and bonds. This was apparent for most of the week as stocks and bonds fell in tandem.

Stocks were on the verge of stringing two positive days in a row for the first time since mid-February but the early gains of Friday were erased during the second half of the trading day. Bond markets showed signs of stabilization as bonds did have two positive days in row to end the week. Bond sold off early in the week to keep the F-fund in negative territory.

Its unknown how much further this downfall can go but its hard to believe it can sustain the high volatile nature for much longer. Years of gains in these markets have been wiped out in a single month and its surpassing the dread of the 2008 financial crisis. Governments, Federal and State, are dumping money and aid in attempt to cushion the downfall but a recession seems imminent. As an investor your top priority is to not lose your money. There is money to be made for short-term market timers who are suffering the ups and downs but for the longer-term investor or when you're only allowed two moves a month its best to step aside until markets show some stabilization.

The S-fund lagged the TSP funds with a loss of 17.35% for the week. C-fund fell 14.97% for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending March 13th:




The SPY (S&P 500 / C-fund) fell early and hard to start the week. The intraday swings remain impressive and interesting to watch as this market daily range or two are greater than entire months leading up to the crash. The trading ranges of March continues to hold and the falling support and resistance held this week. It seems as though market has become over sold but that does not mean the selling is over. We have fallen below the lows of late 2018 which were thought by some to have been a target for the current crash. The C-fund fell 14.97% for the week.




The Dow Completion Indices (S-fund) is a similar story except the 2018 lows were surpassed last week and this week's sell off has then index headed for its 2016 lows. The S-fund lagged the TSP funds with a loss of 17.35%.




EFA (EAFE Index /I-fund) is also closely approaching the 2016 lows. That's an impressive four years of gains wiped out in a month. The index also found resistance Friday before turning the early gains into a loss. Although the losses were kept under 1% Friday. The I-fund had the least damage for the TSP stock funds as it fell 10.37%.




AGG (Bonds / F-fund) moved back to its 50-day EMA early in the week which held as resistance. The index sold off Wednesday to reach lower lows its downfall and traded the rest of the week below its 200-day EMA. The last two days of the week were gains but were kept at bay possibly by descending resistance. The F-fund lost 2.37% 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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