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TSP Talk Weekly Wrap Up

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The bulls took a significant stride this week. Coming off the previous week's loss, stocks put together a three day streak of gains Tuesday through Thursday that were enough to lead the C-fund to more than 2.5% in gains and the S and I-funds to more than 3.5% in gains for the week despite losses to start and end the week. Earnings have not been outstanding but are still slightly outpacing expectations. There are ideas flying around that we have reached peak inflation and the worst yet has past and been priced in. This is all speculation and wishful thinking after the 50 year high CPI report from the previous week. But until proven wrong buyers want to continue to buy.

This latest stretch of gains could be the official move from the 2022 bottom or a bear market bounce. The charts show us that technical resistance has remained significant and there is more to overcome. Both the S&P 500 (C-fund) and DWCPF (S-fund) traded above their 50-day EMAs but pulled back Friday to close about even with the moving average. If that holds, there are more obstacle on the chart before the notorious 200-day EMA can be challenged by the bulls.

We are talking about what it takes to consider us out of a bear market, but not necessarily what it takes to reach buying opportunities. The oscillating nature of the nature gives us opportunities to capture gains where opportunity presents itself. Easier said than done but we have an intelligent community here at TSP Talk to help look for patterns and opportunities.

Next week will be the July FOMC meeting where another 0.75% rate hike is expected. The very next day GDP data will be released. Both events are likely to spark volatility in stocks. Earnings will also continue to be coming in heavy next week. A lot a lot of stimulus for investors to take in.

Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP Talk AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.

Here are the weekly, monthly, and annual TSP fund returns for the week ending July 22:

SPY (S&P 500 / C-fund) closed an open gap from mid-June which at first the bottom of which seemed to be acting as resistance during Wednesday's action. But the gap did get filled Thursday and the top of the open ended up being the high for the week. Is this what buyers were working for and the conquest was a reason to sell? This is very possible. But there is a lot for the markets to react to next week so the next move is as unpredictable as ever. But we can notice some feats made by the bulls this week. Other than the closed gap, the price this week rose above the longterm downward trend line distinguished as a red dotted line below. This trend line holding would have been bad news for the bulls but that is not what we saw. Now we face the top of the open gap and a potential top of a trading channel that has evolved since mid-June. The C-fund lagged the TSP stock funds this week with a gain of 2.56% while the S and I-fund were both over 3.5%.

The Dow Completion Index (S-fund)led the TSP funds for the week with a gain of 3.93%. However the index did not technically fill that open gap that was on par with the one filled by the S&P 500. But similarly the index did end the week about even with its 50-day EMA for the first time since April the day before. An equivalent falling trend line talked about in the S&P 500 was also moved above this week. The outperformance this week was reconciliation for lagging the TSP funds the previous week.

EFA's (EAFE Index / I-fund) outperformed the C-fund but from a technical standpoint has fallen behind the U.S. funds. EFA has not filled either gap from June nor did it trade above its 50-day EMA like the U.S. stock funds this week. The ECB rose interest rates from a negative rate to 0% for the first time in more than a decade. This move drove the Euro to jump in value compared to the dollar and boosted this ETF's performance. The I-fund ended the week with a 3.52% gain.

BND (Bonds / F-fund) has reached prices not seen since May. The ETF has struggled to move past or remain above its 50-day EMA in July but the price surged Thursday to close above for the first time since the beginning of the month and then gapped up Friday to stretch close to the May high and open gap left behind at the end of May. This of course left an open gap below that will be a target for sellers if the moment doesn't hold. The F-fund ended the week with a gain of 1.17%.

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)

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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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Yahoo Finance Realtime TSP Fund Tracking Index Quotes