This week we saw no change in the relentless momentum in stocks we’ve seen thus far this year. The quick government shutdown could not shake things up as a temporary deal was made to get things back and running for now. We got a little more volatility mid-week with some credit given to comments about the weakness in the dollar from Treasury Secretary Steven Mnuchin and follow up comments by President Trump. Pull backs are healthy for the market, especially for traders looking for entry points, but they have not lasted long lately.
Dip buyers, humans and computer programs alike, have been very dependable as the set up is coupled with the common knowledge that everyone else will buy the dips. The S&P 500 went up from open to close Friday to really top off the gains for the week and produce new highs.
We are stuck in a psychological loop where everyone knows that everyone else will continue to buy, and everyone knows that everyone knows that everyone else will continue to buy, and so on. It is going to take uncertainty to turn this market back into ‘normal’ conditions. Next week there will be a FOMC meeting and at this point there is not an expected rate hike expected but of course we can not be certain..
The C-fund led the TSP funds this week with a 2.23% gain while the S and I-funds were up more than 1%. The F-fund was just under par with a loss of 0.02%.
Here are the weekly, monthly, and annual TSP fund returns for the week ending January 26th:
The SPY (S&P 500 / C-fund) continues to trade right in the trading channel of January. The month ends next week around the time the FOMC meeting. Months sometimes have their own character so we could see a change soon. The C-fund was up 2.23% for the week.
The Wilshire 4500 Completion Index (S-fund) hit rising resistance in its trading channel this week to mark the highs for the week. The index pulled back slightly Thursday and could not get back the early gains Friday like large caps. The S-fund was up 1.14% for the week.
$IEE (EAFE Index / I-fund) opened two gaps back to back Tuesday and Wednesday and filled the first Thursday but fell short of filling the lower one. In the course of doing so the index fell below the rising support of its trading channel and was unable to get back above it on Friday. The I-fund was up 1.5% for the week.
AGG (Bonds / F-fund) closed back above its 200-day EMA Thursday and partially filled an open gap before falling resistance kept bonds from continuing higher. The index closed back below the 200-day EMA on Friday and the resistance line is now below the 200-day EMA as well. The F-fund was down 0.02% for the 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 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.