TommyIV's TSP Talk Blog

Stock prices quickly climbed out of their hole and into gains after markets opened down this week. Following a pullback the previous week, buyers regained their confidence and dip buyers went back to work. Buyers did not pick themselves up; credit for their spark is given to the Federal Reserve's announcement that they will begin buying corporate bonds. Despite the nearly three month rally, the Fed's announcement sent a strong message that they will not let markets fall. Whatever the Feds motive outside the health of the economy, investors can comfortably put their money back into bad companies.

Fear of a second wave of virus infections in some states added some turbulence throughout the week but the dip buyers were not willing to let the news spook them. We've said that a second wave and essentially another economic shutdown would be what it takes to knock buyers off their high horse but this week gave credit to how much faith market participants have that the Fed will be there to fix anything.

Buying is not as aggressive as it was two weeks ago and although stocks were up, index prices peaked on Tuesday. This is a change in character but dodging further downside into this week was considerably a win for the bulls especially with news like Apple closing its stores in four states. Index prices now sit in a comfort zone between good underlying support and new frontier since the crash.

All TSP funds were in positive territory for the week. The S-fund led the TSP funds with a 2.86% gain. The F-fund added 0.2% for the week but lagged the TSP stock funds.




Here are the weekly, monthly, and annual TSP fund returns for the week ending June 19th:




The SPY (S&P 500 / C-fund) began its week down but quickly found support from its 50-day EMA rather than take the momentum to fill the open gap below. Instead the index began to fill the open gap produced last week but never traded high enough to completely fill the gap. The 20-day EMA held as support in the latter half of the week. Action this week demonstrated how foundational the underlying support is. Buyers were rejuvenated this week but they still remember the previous weeks lesson: prices can fall and fall quickly. The C-fund gained 1.87% for the week.




The Dow Completion Index (S-fund) did fill its open gap from the previous week but fell back within it as the week went on. This index did open the week below its 200-day EMA but that was short lived after the Fed's announcement of buying corporate bonds. The S-fund led the TSP funds this week with a gain of 2.86% for the week.




EFA (EAFE Index /I-fund) traded similarly to SPY as did not fill its open gap either. The bottom of the open gap did act as support for most of the week. The I-fund grew 1.53% for the week.




The BND (Bonds / F-fund) trading range continues to grow tighter while also moving higher. The index fell from its highs of the week but traded essentially flat the last couple days of the week to keep gains for the week. The F-fund grew 0.2% 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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