TSP Talk Weekly Wrap Up

Stocks ended a positive week with a big rally on Friday triggered by the April jobs report. The report was slightly better than the estimates, but there were some very positive revisions made to prior month’s reports, which may have taken investors by surprise.

Here are the up to date TSP fund returns through May 3.

The S&P 500 continues to defy gravity in 2013 and refuses to make any serious attempt at a pullback. You can see that it is at the top of basically every trading channel you can draw, so while it is tough to fight this trend, the chances of some kind of correction over the next few months seems probable.

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

We’ve talked about the “Sell in May and go away” strategy where over the years stocks have performed much better during the six month period between November and April than from May to October. As I pointed out in one of our commentaries, it might be better to say, “Sell in May, but not right away” because the first three days of the month are actually historically quite strong. But those 3 days are behind us now, and May’s historical seasonality chart gets much more negative until we get toward Memorial Day.

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

The bond market pulled back as investors opted for stocks over bonds after the jobs report. That move triggered a significant short-term technical break down in this bond ETF chart.

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

We’ll have to see how stocks and bonds react this week after the emotional jobs report is digested by investors. Was it enough to propel stocks up another leg while sending bonds down off their recent highs? Or will we see profit taking and the “sell in May” start to kick in? Stay tuned.

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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