Some late selling on Friday and the historically bullish trading day after Thanksgiving turned into a disappointment for the bulls. For the week stocks were up slightly with the I-fund leading the way for the TSP stock funds, and bonds (F-fund) came to life to lead all of the TSP funds with a 0.56% gain during the holiday shortened week.
Here are the weekly, final November, and annual TSP fund returns for the week ending November 28:
Holiday weeks can mess with the technical analysis of a chart, and last week’s breakout above the inverted head and shoulders neckline on the SPY (S&P 500 / C-fund) comes with an asterisk. Was this a fake-out, or is this recent breakout and 4-day consolidation a real breakout that uses that old neckline resistance as support now?
We’ve been watching this inverted head and shoulders pattern for a long time and this is a large pattern that started way back in July with the left shoulder (LS), which took 2-months to form. If we are going to see a right shoulder form we would likely have to get some weakness in early December. The question of the breakout last week is the key. Was it a holiday fake-out that will turn into the right shoulder, or is the H&S done and behind us with new highs to follow?
The Wilshire 4500 (S-fund) is in the same situation, but the neckline is not rising like we see on the SPY. This is a more traditional looking inverted head and shoulders pattern. Long-term bullish, but if the right shoulder forms it would be short-term bearish.
The EFA (I-fund) managed to move up to the 200-day EMA and being in a bear market since October, this is a big test for the I-fund. This is where it would fail if the bear market is going to stick around.
The AGG (Bonds / F-fund) came to life in late November, but if you look at the larger trend, it appear to be near the top of the rising trading channel. The big spike higher in October was an outlier when bonds yields capitulated on the downside side (and bond prices on the high side.) So it will be interesting to see if the resistance of the channel holds.
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 http://www.tsptalk.com/comments.php. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
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