TommyIV's TSP Talk Blog

A new year brings new all time highs. Buyers have not been discouraged and their confidence has allowed political chaos during a pandemic with job losses be a buying opportunity. Stocks fell Monday and it looked like the 2020 status quo was over. But buyers were back to work for the rest of the week. The events at the capital building and the release of the first jobs report with job losses since April were shrugged off as temporary. A lot of credit for the gains was given to the Georgia elections that gave the Democratic party to majority in congress. This will likely lead to more fiscal stimulus this year adding more money to the economy. The promise of vaccines for the pandemic also gives buyers a sense of security.

We've seen bull markets carry on much further than makes sense but it is usually greed that fuels it. As always, there will be an end stocks impressive performance but nobody knows for how long. Buying at the top is hard to reconcile but for months it has paid off. Eventually buyers will be beat pay attention to markets if you were caught in the crosshairs last February during the initial pandemic sell off then think about how you would react differently in a similar circumstance. This is not a call of a top or a prediction of a February repeat; but rather its a warning to not get caught up too much in the greed and have a plan moving forward.

Next week we begin earnings season which may expose weakness it some stocks but there seems to be so much promise for the future that it would be surprise that the numbers could take down the indices by much. Nonetheless remain open for opportunities and put emotions aside.

The S-fund led the TSP funds for the week with a 4.53% gain. The F-fund took a loss for the week putting the index at November prices. The F-fund lost 0.94% for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending January 8:




The SPY (S&P 500 / C-fund) found support from trend lines and its 20-day EMA early in the week. From Thursday's open and op the index was trading above the resistance of two month old trading channel. The index had back to back days of new all time highs to end the week. Friday's high did match a rising trend line (solid red below). The C-fund ended the week with a 1.88% gain which was behind the S and I-fund for the week.




The Dow Completion Index (S-fund) did not end the week at its highs but closed back within its rising trading channel Thursday and again Friday. The 20-day EMA again held as support early in the week and the index rallied from Tuesday on. The S-fund outperformed the TSP funds with a 4.53% gain to begin the year.




EFA (EAFE Index / I-fund) similarly climbed for the week but did not have start the week with losses like the C and S-funds. The index added value everyday of the week and met its high at the rising resistance trend line of the action since mid-November. The I-fund gained 3.14% for the week.




BND (Bonds / F-fund) started slipping on the Georgia election day but gapped down Wednesday following the election results. This put the index back below its 20 and 50-day EMAs leaving behind an open gap. The index found support at the top of an open gap from November around the time the index last closed below its 50-day EMA. Bond yields spiked after the Democratic party took the majority in congress which is likely to lead to more government spending. The F-fund fell 0.94% 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
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