TSP Talk Weekly Wrap Up

After a roaring start last week, stocks peaked on Wednesday and finished with some wild intraday action and a rare weekly loss in 2013. We saw a mini-crash in Japan as the Nikkei lost over 7% in Thursday’s trading. This triggered a very weak open for our indices on Thursday morning, but buyers stepped up again and the battle continued into Friday.

Ben Bernanke added to the chaos by raising the possibility of pulling back on the amount of bonds the Fed buys each month within a few meetings, while the minutes from the Fed’s latest policy meeting showed that some central bank members were willing to pull back on the Fed’s bond-buying program as soon as June.

Here are the up to date TSP fund returns through May 24.

While the bulls are still winning the fight, this last round went to the bears, and as you will see in the chart below, there were some cracks in the technical picture that the bears will try to exploit next week.

The recent sharp rising trading channel on the S&P 500 (red) was broken on Thursday, but that angle of incline was too steep to reasonable expect it to continue for too much longer. Now the S&P is back within the larger rising channel (blue) and the top of that channel could act as resistance again, after having broken above it for several days.

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

One thing to keep in mind is that this is a holiday weekend, and often we see reversals of the larger trend the week before a holiday, only to see that larger trend resume after the holiday.

Historically, the week after Memorial Day weekend is mixed with some weakness on the Tuesday after the holiday, but much stronger action to end the week.

Chart provided courtesy of www.sentimentrader.com

This has not been a typical year where historical trends are staying the course. Remember, we were supposed to sell in May, and go away, but that hasn’t worked out either.

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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