Stocks pressed on this week making a mockery of the “uphill” September seasonality warned by nearly all market analysts and bears alike. Record low volatility may have been the only evidence of the September seasonality this month but there always seemed to be buyers available.
For instance, this Wednesday, President Trump laid out his highly anticipated tax plan. The potential for the president’s tax policy was deemed a great contributor to the relentless bull market we’ve seen since he was elected. In short, his announcement was a normal set up for a “sell the news” reaction. This is a common occurrence experienced in the market’s past. Instead it kicked off more buying to push of the S&P 500 from flat to 0.7 percent in gains in the second half of the week.
There is a chance the proposed tax cuts are not priced in yet. This hypothetical correction could come next week as time has given traders time to really digest the tax cuts. Another possibility is it may take until a more realistic idea of what the acutal policy will look like after opposers in congress lay out their negotiations.
The S-fund led the TSP funds for the week with a gain of 1.76 percent. The S-fund also led the TSP funds for September with a gain of 4.26 percent. The F-fund lagged with the only loss for the TSP funds for the week and for September.
Here are the weekly, monthly, and annual TSP fund returns for the week ending September 29th:
The SPY (S&P 500 / C-fund) continued to rise in price after pushing to the other side of the steep rising support line produced by the action of late August and most of September. The index did end the week with new highs. But a rising resistant line may have held it from pressing on more gains Friday. The C-fund was up 0.72 percent for the week and ended September up 2.06 percent from August.
The Dow Completion Index (S-fund) also made new highs. The index reached long term resistance where it broke through before falling back to the trend line price for the week. With an open gap below, this is a plausible short-term top for this index. The S-fund led the TSP funds for the week and September.
EFA (EAFE Index / I-fund) was down early for the week but turned around to form a short-term v-shaped bounce to wipe out the losses for the week. It seemed the index was on its way to fill the open gap from earlier in the month but was turned around Wednesday. Responsible most likely to the dollar’s reaction to the tax cut talks. The I-fund ended the week nearly flat with a gain of 0.01 percent for the week. The I-fund was behind the S-fund in gains for September with a monthly gain of 2.52 percent.
AGG (Bonds / F-fund) was back above the 20-day EMA early this week and seemed to be headed to fill the open gap above. However, the index gapped down at Wednesday’s open producing another open gap. Bonds closed below the 50-day EMA for the remainder of the week. The F-fund lagged the TSP funds with a loss of 0.1 percent for the week and a loss of 0.48 percent for September.
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.
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