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TSP Talk – End of the 1st Quarter

Stocks saw modest gains last week as the market wrapped up a very successful 1st quarter.

For the TSP, the C-fund gained 0.86% last week, the S-fund was up 0.33%, the I-fund added 0.04%, while the F-fund (bonds) gained 0.12% and the G-fund was up 0.04%.

For March, the C-fund finished up 3.30%, the S-fund gained 2.30%,the I-fund made 0.13%, the F-fund has lost 0.61%, and the G-fund has added 0.14%.

For the year, and the end of the first quarter, the C-fund is up 12.63%, the S-fund led the way gaining 14.45%, the I-fund picked up 10.91%, the F-fund and G-funds have added 0.32% and 0.39% respectively.

The S&P 500 had its best 1st quarter since 1998 when it gained 13.5%. April of 1998 saw the S&P tick up another 0.09%. It lost 1.9% in May, and the 2nd quarter of 1998 ended with a gain of 2.9%.

The differences between 1998 and today are vast. The dot com bubble was well under way back then, and still two years away from the top. This year of course is an election year and we are still slowly climbing out of the 2008 economic disaster.

The pullbacks in the S&P 500 continue to be shallow and are finding support quickly as the 20-day EMA is holding each time it is tested. Since the lows last December the S&P 500 has only closed below the 20-day EMA two times. Sounds like a bull market.


Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk


I am not seeing all that much to be concerned about. That could change with one dramatic event or economic development, but that is true all of the time. The one thing that got my attention this weekend was the fact that
large, commercial hedgers are getting longer and longer (buying) the bond market recently. That has a history of preceding bond market rallies. If the bond market rallies there is a good chance it will be at the expense of the stock market, so perhaps something is brewing that this group of “smart money” knows.

Being that we (TSP account holders) can sell and move to the G-fund within a day, I believe dips can still be bought until we see a break in the technical picture. Selling the stock funds to try to buy at a lower price later, as I have found out, has not been paying off unless your timing has been impeccable. Keep an eye on the support lines and moving averages (EMA’s) and as long as the S&P 500 is trading above them we should be more willing to take risks.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.

Tom Crowley
www.tsptalk.com
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