TSP Talk Weekly Wrap Up

Stocks saw their first meaningful weekly loss since the week of June 17, and it was overdue. The concern, or uncertainty, on Wall Street is when the Fed is going to start tapering their bond buying. Earnings season is winding down, trading volume has been drying up, and the weak seasonality of August seems to be kicking in, although the resilient bulls might have something to say about that.

Here are the up-to-date weekly, current month, and annual TSP fund returns through August 9.

The rising support line on the S&P 500 did break on Tuesday, and we’ve seen a slight pullback from recent highs, but so far the next levels of support, the 20-day EMA and the May high, have held up.

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

We’ve been talking in the forum about the recent Hindenburg Omen signals as we saw 3 this past week. I won’t go into it again since we talked a lot about it in June / July, but basically these signals have a tendency to precede market crashes (very rare) or at least some sort of market pullback. In June the market dipped 5% after the Hindenburg Omen signals.

Our friends at sentimenTrader.com have been on top of this, pointing out that have been 11 HO signals in the last 50 trading days. That is a rare occurrence itself and you can see from their chart that the market does not have a good record afterward.

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

Three months out, all 6 prior occurrences saw losses at an average of -3.5%, and only in 1965 were there any gains 2 weeks to one month out.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at http://www.tsptalk.com/comments.html.

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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