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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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The bulls remain resilient while the bears continue to point at the economy. Stock prices gapped up Monday to start a week that would trade in a flat and relatively tight trading range the next four days. The bulls got their gains early but maintaining the gains in the face of resistance and the constant accumulation of poor economic numbers reflected the strength of buyers. Economies and towns are opening back up and I think investors have faith in strong comeback. Stocks are always a bet on the future state of businesses and there are undeniably stocks out there that are at a bargain for what they are worth; but the indices make it seem as though that is the majority of businesses.

The greatest threat to markets is a second outbreak which would result in another shutdown. Enough damage has been done and its hard to see how quickly some sectors that rely on direct human interaction will recover with how our situation currently stands. If another nationwide shutdown was implemented it would be a loss of hope for many investors. But for now hope is strong and the gap up this week has brought back the idea that the V-shaped recovery is still on. Likely we are just on the upside of the price battle and the trajectory is on the rise. That is a dream set up for swing traders.

The bears are pointing at the economic data and it seems clear to them this correction will last longer and fall deeper. The S&P 500 is valued at the same prices it was back in the summer of 2019 when we were in a far better economy. Its hard not to question the sanity of these figures but more often than not it is bad idea to consider the market logical.

The S-fund had a strong week with a gain of 6.89% to lead the TSP funds. C and I-fund both gained more than 3% for the week. The F-fund lagged but also produced slight gains for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending May 22nd:




The SPY (S&P 500 / C-fund) gapped above its 200-day EMA Monday which had been a key resistant trend line in the last month. The new resistance this week was the 200-day simple moving average that we don't usually talk about. Check out our chart education page to learn about the differences in the moving averages. The jump on Monday left a gap but the 200-day EMA may have its chance as support going forward. The C-fund was up 3.28% for the week.




The Dow Completion Indices' (S-fund) outperformed this week but still has yet to test its 200-day EMA for resistance. Despite the decent gains we did see resistance from the rising trend line that the index broke below the previous week. The S-fund gained 6.89% for the week.




EFA (EAFE Index /I-fund) was up but didn't make any new technical developments like the above indices. The highs of April held as resistance after the index jumped above its 50-day EMA. That's not uncharted territory for the index but a good sign that the 50-day EMA held as support as the week continued. The I-fund was up 3.03% for the week.




AGG (Bonds / F-fund) grinded higher even with stocks making their press higher. The trading range remains tight for the bonds but that is not out of the ordinary (unless you have a liquidation crisis). The question is whether its worth putting money in a stagnant fund near its highs but it does carry a higher level of safety than the stock funds. The F-fund was up 0.36% for the week but lagged the stock 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
www.tsptalk.com
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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S&P500 (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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