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TSP Talk Weekly Wrap Up

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Volatility continued this week resulting in mixed stock action but with a common pull back from the mid-week highs among the TSP stock funds. The S and I-fund finished the week with gains while the C-fund, which follows the action of the S&P 500, fell for a third straight week. The difference is the weight of the troubled tech sector the S&P 500 holds. Big tech names continue to drag down indices performances and the result is a false representation of the market as a whole. Investing in the C-fund is investing in the tech sector. They had been driving market prices nearly straight up since March but are now in a state of correction. Their capital weight on the S&P 500 has forced a third week of losses. If the index held an equal weight of the companies it represents the index would have gained 0.7% for the week

There was a pull back from all three stock funds off their Wednesday highs but as money moved out of tech it fell back into value names. This is a good sign for the market as a whole. Investors are eager to put money to work and rather than running out of stocks are putting their money to work in neglected stocks. As a result we saw a 2.85% gain in the S-fund which follows small cap indices.

Volatility isn't over and we have a few weeks to anticipate third quarter earnings along with the stir the election projections will cause.

Bonds also came off mid-week highs and into negative territory. The F-fund fell 0.09% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending September 18th:

The SPY's (S&P 500 / C-fund) started the week with gains and edged higher through Wednesday but the action was corrected Thursday. Two days of losses at the end of the week pushed the index into negative territory. The index broke above its 20-day EMA intraday Wednesday but would eventually end the day back below. From there the index fell and spent some time below its 50-day EMA Friday but closed for the day at the moving average. The C-fund fell 0.6% for the week to lag to TSP funds.

The Dow Completion Index (S-fund) added gains quickly this week and spent two days above its 20-day EMA. Like large caps the index pulled back following the gains on Wednesday but the selling was limited and the index was able to gain 2.85% for the week. Now contained again between its 20 and 50-day EMAs, the index also sits within a bear flag but has the support of the 50-day EMA to attract new buyers.

EFA (EAFE Index /I-fund) matched intraday highs of earlier in the month on Wednesday. EFA also pulled back from those Wednesday highs to end the week but the 20-day EMA held as support Friday to keep the index in positive territory for the week. The I-fund was up 0.78% for the week.

The BND (Bonds / F-fund) moved about this week and eventually ended the week at its lows for loss. The good sign is the support of the 50-day EMA that had faltered in the last month. The support and resistant levels are forming a wedge pattern which are usually bearish but in general tend to force an index to pick a direction. Uncertainty has not helped bonds but has kept them afloat. The F-fund fell 0.09% 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
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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