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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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The recovery trajectory was broken this week but an impressive reversal off the lows compels credit to be given to buyers. More deteriorating economic numbers ahead of the reopening of many economies in the U.S. took their toll on stock prices but it was Jerome Powell's not so reassuring comments Wednesday that really spooked the market. His concern that there is still need for stimulus from the government to essentially save the economy had investors question their holdings and the real value of stocks. However an intraday reversal Thursday off lower lows for the week took back a portion of those losses. Again stocks ended Friday in positive territory for the day after spending much of the day in red. Not so much a win for the bulls with the stock indices still down more than 2% for the week, but it was sign of strength from dip buyers that could suggest the battle for direction is likely to continue.

Covid-19 has been front and center for some time now and has been the cause of most moves and speculation in some way or another; but geopolitical noise made its way back in this week. More tensions between the U.S. and China that could affect the resilient tech sector adding to the mess we already have. There was speculation that Apple could somehow be included in China's retaliation.

Many parts of the country reopened their economies this weekend with no real idea of what will be the outcome. The worst would be a new wave of infections that would wipe out the progress already made and put the shutdown back on. A lesser concern aside from just the pandemic is whether the consumer wants to come out and whether the economic standstill has significantly reduced the buying power of the consumer. This will be closely watched and will affect investor actions.

All TSP stock funds were down with the S-fund taking the greatest hit by losing 4.44% for the week. The F-fund led the funds with a gain of 0.32% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending May 15th:

The SPY (S&P 500 / C-fund) sold off its 200-day EMA Tuesday but took on more selling Wednesday after Jerome Powell's comments and the index closed below its 50-day EMA. This seemed the be the beginning of the end of the bear market rally but dip buyers saw the sell-off as opportunity not a warning and brought prices back above the 50-day EMA and about where they've been for a month. An obvious trading channel has made the index relatively stagnant for the long term investors yet created some great opportunity for swing traders. The C-fund fell 2.21% for the week.

The Dow Completion Indices' (S-fund) March open gap held strong as resistance for the index before the index reversed and spent some time below its 20-day EMA. We talk a lot about how open gaps want to be filled but in reality the open gap prices are a price of significance and in this case it represent an obstacle for an index attempting to recover. A rising trend was broken the week and although the index came off its lows its was held to close where that rising trend, 50, and 20-day EMAs all intersected. The S-fund lagged the TSP funds with a 4.44% loss for the week.

EFA (EAFE Index /I-fund) fell off its values around its 50-day EMA early in the week and eventually fell below its 20-day EMA which had been significant support in the last month. An open gap is within reach but would imply an increase in volatility for it to be filled within a week. The I-fund lost 3.18% for the week.

AGG's (Bonds / F-fund) was the winner for TSP funds this week with a gain of 0.32%. Still the index has a relatively tight and flat trading channel and still has the April highs to test. The index did close below its 20-day EMA early in the week but remained above its the last three days of 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
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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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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