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TSP Talk Weekly Wrap Up

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The large caps C-fund broke the weekly winning (gains) streak for the TSP funds. The other funds all produced mild to modest gains for the week that proved to be slippery. The bears showed some life this week and had many questioning if this was the beginning of a larger correction. Stocks slipped Monday and Tuesday but the bulls showed some life Wednesday despite gloomy morning that started with disappointing numbers in the Netflix earnings report. The indices trotted towards the record highs produced the previous week for the rest of Wednesday.

The real excitement for the week came Thursday when news leaked that the Biden administration planned to raise capitol gains tax on the ultra rich. The numbers suggested obviously need to make it through congress first but even if the tax remained in the 40's, it will be for those with enough money and lawyers to dodge the tax anyway; so the effect will be minimal. Nonetheless it spooked investors who dropped Wednesday's gains like a hot pan. But those losses were recovered Friday when strong economic reports for the service sector and manufacturing output suggested the economy is in full recovery mode and the dip buyers flocked back to stocks.

Buy low sell high is the mantra and currently stocks are high. But selling gets hard when the market is hot. Missing out on gains because you sold too early can feel just as bad as taking a loss. But the truth is it is not as bad as taking a loss and eventually those who held for too long regret for not selling earlier. This week's action showed some signs of weakness while simultaneously showing signs of resilience. Protecting capital at the degree in which fits your risk tolerance is important to evaluate in your allocations. You can always reduce exposure while keeping a foot in the door.

The S-fund outperformed for the week with a gain of 0.6%. The C-fund took the only loss but it was a modest 0.11% and is just as much below all time highs. Bonds continued their weekly winning streak adding 0.15% this week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending April 23:




The SPY (S&P 500 / C-fund) fell below the rising support Tuesday that was present for all of April. The index increased its trading range for the rest of the week while remaining below the highs of last week and the trend line it fell below Tuesday. The week was down but momentum is still on the side of gains. The C-fund fell 0.11% for the week.




The Dow Completion Index (S-fund) was down early for the week and fell to its 50-day EMA (purple) which was a foundation for the week's lows. The index climbed back the second half of the week and by Friday's close was up 0.60% for the week to outperform the TSP funds.




EFA (EAFE Index / I-fund) gapped down Tuesday but filled the open gap over the next three day. The 20-day EMA held as support Tuesday at the low. EFA did not get back to the previous week's close but the I-fund did gain 0.14% for the week.




BND (Bonds / F-fund) remained in the trading channel of April this week which put it above the 50-day EMA. This is despite the positive economic reports which tend to send yields higher and bond prices lower. This is not the case this week which makes you wonder what is brewing under the surface. The F-fund was up 0.15% this week which put it up 1.0% for April so far.





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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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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