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TSP Talk Weekly Wrap Up

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Stocks took a turn this week in response to the worst week since 2020. Both the C and S-funds ended the week up more than 6% with around half of those gains coming from Friday's action. Analysts credit this week's gains to slowing economic data that investors think will dissuade the Federal Reserve from aggressive rate hikes; the old 'bad news is good news' thought process when the Fed plans on tightening monetary policy. This does have validity, but the magnitude of this week's buying is made possible by markets being oversold in the previous week. Indices reached new lows for 2022 in the previous week following the FOMC aggressive rate hike, so this week was the emotionally driven upside response of the oscillation.

Now the question is if this week's gains can be sustained to any degree next week. We are undeniably in a bear market, and bear markets contain big upside swings that wouldn't be typical even in a bull market. So, it is hard to argue this is a beginning of an end. In the DWCPF (S-fund) chart below we see that we've had stretches of gains in stocks in the past few months that were could not be sustained and eventually led to further downside. The past does not dictate the future, but it should bring caution to those who were on the sidelines this with struck with FOMO. The buy low, sell high mantra may be no more essential than in bear markets. This week, especially Friday, was more of an opportunity for sellers looking to lock in recent gains.

That is not to say there no room for further upside, but rather cry for caution. All three stock charts below have open gaps above the current price that may persuade new buyers to keep this rally going further. A lot of stocks are still considered oversold. But this is may not be a wise time to buy heavy and with intentions to hold for long-term.

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Here are the weekly, monthly, and annual TSP fund returns for the week ending June 24:

SPY (S&P 500 / C-fund) closed an open gap from the beginning of the previous week and was stretching towards another at Friday's close. Friday's action put the ETF back above is 20-day EMA. The C-fund added 6.46% this week to counter the 5.75% loss of the previous week. The C-fund is now down 3.46% for June with four days left in the month.

The Dow Completion Index (S-fund) led the TSP funds this week with a gain of 6.81%. The respective gap filled by SPY was not technically filled by DWCPF. Noted on this chart is two previous multi-day rallies in the last couple months that could not carry on to further gains. This is typical performance in a bear market. The index did end the week above the 20-day EMA so that could be the foundation the bulls are looking for to justify further buying.

EFA's (EAFE Index / I-fund) also has an open gap that was partially filled this week. The difference for the EFA was the gains were not there early in the week. The I-fund lagged the TSP stock funds with a gain of 3.41% for the week that mostly came from Friday's 2.79% gain. The current price is surrounded by open gaps on both sides.

BND (Bonds / F-fund) produced a new open gap this with as bonds were up early in the week. The ETF could not close above its 20-day EEMA and pulled back Thursday and Friday after spending time above the 20-day EMA intraday. The F-fund lagged the TSP stock funds with a gain of 0.61% 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
Last Look Report
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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)

( Real-time)
DWCPF (S Fund) (delayed)

( Real-time)
EFA (I Fund) (delayed)

( Real-time)
BND (F Fund) (delayed)

( Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes