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TSP Talk Weekly Wrap Up

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Stocks produced a higher high in the comeback rally Wednesday but troubling earnings from thought to be invincible tech giants gave investors a taste of reality. Indices gave back a majority or all of the gains from the first half of the week when pressure to sell began accumulating Thursday and into Friday. Along with unimpressive profits from stocks that had been leading the April rally, economic data began piling on that suggests the economy may be in real trouble. Unemployment claims are still on the rise and in turn consumer spending had its greatest one month decline on record.

This week's late sell off now has analysts jumping up and down, waving their arms, and proclaiming that comeback rally is over. That makes total sense, it's no secret to anyone that it is not a good time to be in business and its seems foolish to be putting your money into an economy that had its plug pulled. But that also made sense in late March and mid-April when stocks pulled back and the same analysts were just as sure. My point is not to say that the rally is bound to continue. I just don't want to make the assumption that the market is ready to behave according to logic.

The Fed has been a major life force to the comeback rally and has fed parts of the economy what seems like all the stimulus it could. In this week's FOMC meeting Jerome Powell acknowledged the broken state of the economy but reassured investors the Fed will continue do whatever its capable of (print more money) to glue it back together.

Stocks were mixed for the week. The C-fund sold off into negative territory for the week on Friday while the S and I-fund were pushed off their highs but remained above 1.5% for the week. The F-fund slid 0.15% for the week despite money leaving stocks late in the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending May 1st:




Here are the TSP fund returns for the month of April:




The SPY (S&P 500 / C-fund) kept within the tight range rising channel into this week where it finally met its 200-day EMA. The moving average was penetrated stocks earnings number could not give the index the fuel it needed to break trade higher. The index fell Thursday and eventually had large enough losses Friday to erase the week's early gains. The 50-day EMA marked the lows of the week. The C-fund was down 0.19% for the week to lag the TSP funds. It was its second consecutive week of losses.




The Dow Completion Indices (S-fund) found resistance not at its 200-day EMA but rather the bottom of an open gap it seemed destined for. The bottom of the open gap intersected with rising resistance of the trading channel the index was trading within. The index fell with large caps but was able to conserve 2.05% gains for the week to lead the TSP funds. The index left a small open gap behind when it opened lower Friday.




EFA (EAFE Index /I-fund) was also denied the chance to fill the open gap in reach. The rising resistance of the trading channel was the peak of trading for the index. The index fell below its 50-day EMA and found support at its 20-day EMA. EFA was able to hold onto early gains as it ended the week with a 1.51% gain.




AGG's (Bonds / F-fund) has nearly flattened out and continues to shrink its trading range. The anomaly this week was the lack on bond interest as stocks sold off late in the week. The index may be stagnant but its not too far from a 5% gain on the year. The F-fund fell 0.15% 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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SPY (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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