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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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Technical analysis is more psychological/sociological speculation on investors than an exact science of chart patterns. An index lets us (everybody) observe where others were willing to buy and sell in the past. Everybody wants a discount on what they think is the true value of stocks. The stock price at the end of the previous Friday and into Monday was a price buyers knew they could find a safe discounted entry. The highs Thursday morning was where sellers thought they could get their best price based on that value being a peak price multiple times in the later half of June. Together the sociological effect gives the market a trading channel. This week was the rebound off the lows to the highs of that channel.

Market timing has been the name of the game for most of us on TSP Talk. Market crashes and V-shaped recoveries with outrageous volatility is not our sweet spot. But when markets calm down and emotions are collected, markets begin to oscillate in search of true value. That's the playground of swing traders; especially when you've got two trades a month to work with. I believe that's where we have entered out of June and into the second half of the year. A lot of news will be glued by analysts as to why markets move any particular direction. Although sometimes news events do carry weight, market action will be mostly driven by the battle of true value between buyers and sellers. A lot is still going on with the pandemic and the rate of economic recovery, those must be respected, but it is also time to set aside what happened to your portfolio (good or bad) in the first half of 2020 and respect the market's change in character.

A better than expected jobs June jobs report Thursday pushed stocks to their highs of the week but profit taking quickly kicked in and even accelerated just before the holiday weekend. A steady climb for most of the week gave the U.S. stock funds more than 4% in gains. Despite stocks being up, money moved into bond markets giving the F-fund a slight gain of 0.13%.

Here are the weekly, monthly, and annual TSP fund returns for the week ending July 2nd:

The SPY (S&P 500 / C-fund) found support in the 50-day EMA for the second time in June. The index price rose from there until finding resistance near the previous highs since the June pull back. We saw a similar trading channel to what we have had the last few weeks back in late April and early May. Eventually the index broke out of the trading channel and produced further upside. A notable difference is the current trading channel is below the recent highs, its peaks have not established the recent highs. Support is strong and established but we now wonder how much weight the overhead resistance has to keep the price contained. The C-fund was up 4.07% for the week.

The Dow Completion Index (S-fund) is similarly contained by the secondary highs of June. The 200-day and 50-day EMA currently are about equal in value and are considered strong support for now. The S-fund led the TSP funds this week with a gain of 4.26%.

EFA (EAFE Index /I-fund) lagged the TSP U.S. stock funds. Support off the moving averages was a great entry point for buyers buts its highs of the week were did not par with the secondary peak in June. The index gained 1.66% for the week.

The BND (Bonds / F-fund) continues its steady climb and even ended the week trading above rising trend line. This move could be looked at a selling opportunity or technical strength. The relative safety of bonds may keep its investor not so trigger happy for profit taking. The F-fund was up 0.13% for the week and remains the only TSP fund outside of the G-fund in positive territory for 2020.

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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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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