TSP Talk – Weekly Wrap Up

More gains for the stock funds last week as this 5-day chart looks a lot like the prior week’s 5-day chart. Everyone is aware of the upcoming debt ceiling negotiations, yet the market continues to climb the proverbial “wall of worry.”

Here are the TSP fund returns for the week of January 14 through January 18.

The S&P 500 chart (C-fund) broke above the September high resistance (blue) last week, and continues to ride along the underside of the top of the ascending trading channel (red). A break of the narrow short-term trading channel (green) could be a key to let us know when a dip is going to be something more significant.

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

Taking a step back, the intermediate-term picture shows a rising wedge (red) that may produce some meaningful resistance near 1500. That’s only about 1% above where it closed on Friday.

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

Stepping back further and looking at the longer-term chart shows us that there is a lot of room on both the upside, and the downside of the long-term rising trading channel (red) and which way the intermediate-term wedge (blue) breaks, may determine which end of the rising trading channel will be tested first.

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

Right now stocks are on the overbought side, but momentum is on the upside and we may want to respect that until we see a change or break in the trends. Stepping in front of the path of an freight train that has momentum can leave some bruises, and freight trains don’t usually stop on a dime and reverse direction quickly. In the top daily chart of the S&P 500 that narrow short-term trading channel I mentioned, may be the key. If that breaks to the downside, we could see a more pronounced pullback, but until then we’ll see if the minor dips continue to be bought.

Per www.tsp.gov: Some financial markets will be closed on Monday, January 21st in observance of the Martin Luther King, Jr. holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 21st) will be processed Tuesday night (January 22nd), at Tuesday’s closing share prices.

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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