The weakness of August has now rolled into September, historically the worst month of the year. As the VIX sits near 30, which is a dangerous level, stocks are vulnerable for another panic-like sell-off. It’s possible we will see a bottom in September but first the market seems to want to test the August lows, and the Fed’s decisions on interest rates later this month may be the deciding factor.
China is still very much on the radar, but it seems investors are focused on the price of oil which rebounded sharply last week but failed at the 50-day EMA and fell in unison.
Here are the weekly, monthly, and annual TSP fund returns for the week ending September 4th:
Volume was a little heavier last week than a typical pre-Labor Day week, and it could pick up as vacations wind down for Wall Street’s money managers. Of course, with instant access from anywhere, that’s not as big a factor as it use to be. The market will look for direction next week after chopping around for week or so. There’s been a lot of technical damage done to this chart and now that this is considered a bear market we should probably expect a bearish outcome. The C-fund was down 3.36% for this week.
The Dow Completion Index (S-fund) is also in a bear market and we could be looking at a big bear flag and that’s not usually good news. Testing the lows is a very good possibility in the weeks ahead. The S-fund declined 2.48% for the week.
EFA (EAFE Index / I-fund) may be the worst of them all as it is already down testing the August lows. This may be our clue for the U.S. stocks if the test is successful or not. The I-fund was down 4.37% for the week.
Here’s the chart of oil, it rallied strongly but being in a bear market, the 50-day EMA will act as strong resistance.
The last couple week’s action created a bear flag formation for AGG (Bonds / F-fund) which it broke through to the upside Friday. There is a good amount of room above to grow in its current trading channel and if the markets do test their lows, bonds will be a safe haven for traders timing a bottom in stocks. The F-fund was up 0.29% 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 the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
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.