TSP Talk – We hate to see January go

Despite the S&P 500 being down 3 of the 5 days last week, the major indices all managed to close in positive territory for the week, with a strong showing from the small cap and international funds. The market was bolstered by the Fed’s reassurance of low interest rates through at least 2014, and left the possibility of a QE3 on the table.

For the TSP, the C-fund was up 0.10% on the week, the S-fund gained 1.87%, the I-fund made 1.65%, while the F-fund (bonds) added 0.61%, and the G-fund was up 0.03%.

For the month, the C-fund is now up 4.81%, the S-fund has gained 8.26%, the I-fund has made 5.98%, while the F-fund (bonds) is up 0.52%, and the G-fund had made 0.11%.

The S&P 500 has remained in a very tight ascending trading channel since the week prior to Christmas, so the trend traders and “buy and holders” have been rewarded handsomely. Market timers are having a little tougher time because this rally has gone on longer than many have expected, and the indicators have been overbought and extended for a couple of weeks now.

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

The smart money / dumb money confidence indicator from SentimenTrader.com, which is a compilation of many indicators, shows us just how bullish the dumb money has become, while the smart money has backed off.

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

Whenever we see this indicator hit 60 more or on one side, and 40 or less in the other, we have enough of a discrepancy to take note. With the dumb money currently at 67 and the smart money at 38, this can be considered a warning sign for the stock market, at least in the short-term.

February is historically a tougher month for stocks after coming off of the much stronger November through January period.

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

It will be tough saying good-bye to January.

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

Tom Crowley
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. 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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