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TSP Talk Weekly Wrap Up - A Failed Bounce

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September ended with the bulls giving up control during their rebound attempt from the recent sell-off. The stock market has been in a downtrend for the last two months, but the previous week's FOMC meeting ignited an acceleration in selling that continued through the first half of this week and brought prices down to lows not seen since June for the C and S-fund.

Price action flipped direction swiftly mid-Wednesday and the new momentum held through Thursday. It seemed as though the bulls were putting together their own relief rally after the indices had been oversold.

The stock indices were even holding respectable gains heading into the TSP trading deadline on Friday, but suddenly the buying ran out of steam and investors were quick to sell the scraps to aid their recent losses.

It did not help that investors are again dealing with potential government shutdown drama. There is a risk of investors and the Fed missing out on important government-run inflation data in the case of a shutdown.

Investors got their latest inflation data on Friday. The Personal-Consumption Expenditure (PCE) came out and showed the rate of inflation was slowing, yet consumer income was not keeping up. Consumer spending has been the main engine powering the economy through higher interest rates and high inflation, but the consumer's ability to persevere is coming into question. Without their contribution, the economy would certainly fall into the recession that has loomed over stockholders' heads through the last year.

TSP investors are in a strange spot moving forward. There is the appeal of lower prices to buy into or at least store new contributions, but these index charts face technical overhead that will have buyers buying into some headwinds. So you must choose between owning stocks now at lower prices with the risk of getting in too early or waiting for the technical conditions to improve and buying stocks at a higher price.

See how your peers will use their new set of IFTs in the first week of October with the Last Look Report.

The S-fund was actually able to hold a gain into the end of the week after consistently outperforming the C and I-fund throughout the week. The S-fund gained over 0.7% this week while the C-fund stood on the other side of even with more than a 0.7% loss.

Here are the weekly, monthly, and annual TSP fund returns for the week ending September 29:

The SPY (C-fund) chart found its low for the week at its 200-day EMA. The moving was the most obvious support target to get in new buyers. The only problem is those buyers lost enthusiasm on Friday. The target for buyers would be at least the bottom of the open gap above, but the government shutdown drama may force another test of the 200-day EMA.

The C-fund ended the week down 0.72%.

The DWCPF (S-fund) is already below its 200-day EMA but it still contributed to the price action this week by acting as resistance rather than support and it marked the highs of the week. The top of the open gap that has been open since June acted as the support this week that established the lows for the index this week.

While the other TSP funds took a loss this week, the S-fund was able to hold a gain of 0.76%.

EFA (I-fund) is also attempting to bounce off its new lows established this week but still holds a long-term falling trend. Like the S-fund chart, it also sits below its 200-day EMA which is the bulls' first major hurdle for any kind of oversold bounce.

The I-fund lagged the TSP funds this week with a loss of 1.42%

The bond market has not controlled its bleeding. Yields continue to rise and bond prices continue to establish new lows. The F-fund lost 0.97% this 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 TSP Talk - Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.

Thomas 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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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