TSP Talk Weekly Wrap Up

Stocks struggled to find direction last week but in the end the bears won the battle as the selling on Friday led to modest losses for the week.

Here are the up to date TSP fund returns through June 14. Last week’s losses took the C and S funds into negative territory for the month, while the I-fund is clinging to a small gain. The F-fund (bonds) closed the week with a 0.24% gain, but it is still down for the month.

I talked this past week in the daily commentary about the possible negative 1987-like setup we are seeing in the S&P 500. I’ll put that data aside for this Weekly Wrap Up and just show that the longer-term support is still rising but it has been tested recently. Buying at support in a bull market is usually a good idea but if this breaks there will likely be a change in the character in the stock market and playing a little more defense wouldn’t be a bad idea.

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

Bonds and the F-fund have been in a downtrend since the peak in early May. A nice little rally on Friday took this bond ETF above the descending trading channel, but it closed very weakly so it could just be another failed breakout like we saw in mid-May.

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

Stock market crashes are very rare but we have seen a few ducks line up that gives me some concern that something may be brewing. I am personally staying defensive here while the 1987 comparison plays out, and any buys I make into the stock funds will be very short-term in duration until we get past this. The FOMC meeting will be on Tuesday and Wednesday of this week with Ben Bernanke giving a press conference on Wednesday. That could shake things up a bit.

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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