TSP Talk – Weekly Wrap Up

The action was very slow last week with very minimal swings in the market indices. Perhaps this long holiday weekend is what was needed, although the seasonality surrounding President’s Day is not all that impressive compared to other holidays.

Small caps (S-fund) led the way with a 0.59% gain while the I-fund was down 0.5% after a weaker than expected GDP report came out of Europe last week.

Here are the TSP fund returns for the week of February 11 through February 15.

I don’t know if this is just tentativeness in front of the March 1 sequestration, or a strong market that is pausing to catch it’s breadth, or just business as usual. The action has been very dull but the S&P continues to ride up the narrow rising trading channel (red) as it has been doing all year.

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

On January 29 I wrote a commentary called, Stick a fork in me at 1525, based on the longer-term resistance we see in the chart below. At the time the S&P 500 was sitting near 1500 and I actually sold my stock fund holdings about a week later not wanting to get too greedy. Well, the S&P 500 has not relented since but it did hit a high of 1525 this past week (1524.69 to be exact) and after a run like this market has had, this looks like a good place for a rest.

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

But strong momentum rallies don’t die easily and markets do tend to do what the majority would least expect and a breakout to the upside from here without some kind of a pullback first would probably surprise the most people. Our sentiment surveys show that a majority of our readers are bearish and that is usually a recipe for more upside. That’s not what I’m counting on since I don’t like the risk / reward odds here, but it shouldn’t surprise us if the market does the opposite of what most of us are expecting.

The seasonality surrounding President’s Day is fairly weak with the first 3 trading days after the holiday showing more declines than gains over the years, and only Friday shows any note worthy positive average return.

Chart provided courtesy of www.sentimentrader.com

From the www.tsp.gov website: Some financial markets will be closed on Monday, February 18th in observance of the Presidents’ Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (February 18th) will be processed Tuesday night (February 19th), 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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