TSP Talk Blog

Stocks sold off on Monday, but certainly nothing extreme, particularly given how far the indices have come in the prior few months. The Dow lost 183-points and we saw similar losses in most of the major indices, give or take. Bonds recovered from a sharp early loss to close just slightly lower on the day.

Daily TSP Funds Return More returns

With the gains we saw in 2019, it was a little surprising that we didn't see much profit taking in December. I don't know if had anything to do with Monday's losses, but it was the first day that you could sell where the taxable gains would roll into 2020 because of the 2-day settlement rule, so that may have encouraged some patient profit takers to finally make a move.

I have been expecting some kind of pullback for a while now, but don't want to make too much of yesterday's selling with volume being so light, although we haven't seen any profit taking and this could be an indication that investors are waiting for the New Year to start pulling the trigger to off those capital gains taxes for another year.

This has been an interesting couple of weeks with the holiday coming on a Wednesday. Instead of the normal 4 day shortened trading week that we get when there's a holiday, we're getting 4 mini two day weeks of trading, so yesterday was Monday and now today feels like Friday already, and we do it all again on Thursday. It reminds me of when I used to work four 10-hour shifts when I was a government employee and took Wednesdays off so that I was either off yesterday, or off tomorrow. But I digress. Let me wrap this up and make this another quickie. Enjoy your New Year celebration and I'll see you next year.

Admin Notes:

AutoTracker: Do you want us to track your returns? Just mirror your TSP IFT's in our AutoTracker and we will track your daily, weekly, monthly, and annual returns for you. We're getting it ready for 2020 so make sure that you've logged in to the AutoTracker within the last few months so we know you're still around and want to keep your account active for next year. If you're new to the AutoTracker, go here for more info and to get started. If new, you may need to check your spam folders to confirm a new forum account. Gmail and others seems to do that to us. More

2020 Guess the Dow Contest: It's time for our annual Guess the Dow Contest. Make your guess here... Guess the Dow

---

The S&P 500 (C-fund) saw a moderate loss and it closed near the lows of the day, which was that middle rising support line (red dashed) that we have been watching. The next move will be important since if that support breaks, the next support level would be about 50-points lower.




The DWCPF (S-fund) was down but it was able to close off the lows so we did see some dip buying here. January has historically been a good month for small caps, although in recent years that has slipped into December, and even November, as investors try to be the first to take advantage of that seasonal bias.




The EFA (I-fund) pulled back sharply despite another dip in the dollar so this was a particularly concerning day here. Perhaps it was because the U.S. stocks were near their lows in the morning when the European markets were closing. But with the dollar successfully testing some support yesterday, the I-fund may be under a little more pressure than U.S. stocks in the coming days.




The Volatility Index spiked up to 15 yesterday but held once it tested the 200-day EMA. The bulls certainly do not want to see this back above the 200-day EMA because that's when things can get wild. The bears who are looking for a shakeup, will welcome some volatility here.




The AGG (F-fund / bonds) opened sharply lower and looked like bond we were going to see that bull flag breakout fail, but instead it fell enough to fill that open gap then came back strong as the day went on and while the gains weren't there at the close, the positive reversal was bullish for bonds.




Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. Happy New Year!

Tom Crowley


Posted daily at www.tsptalk.com/comments.php

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.