TSP Talk Weekly Wrap Up

Stocks were relatively flat on Friday but it was a wild day to end the week. The jobs report was a disappointment with over 10,000 fewer jobs being created in August than was expected, and there were also downward revisions made to both June and July’s report. The good news is, the unemployment rate dropped to 7.3%. The bad news is it was mostly because 300,000 people stopped looking and left the workforce.

A simple example of why that lowers the unemployment rate would be if you had a 2 person workforce. One is employed. The other is unemployed and looking for work. In this case the unemployment rate would be 50%. If that person who is unemployed decides they no longer want to look for work, they would be dropped from the workforce count and the new unemployment rate is 0%. There’s one person left in the workforce and they have a job.

The market reacted by jumping around quite a bit as there is confusion over whether bad data is actually good news with the Fed considering whether to taper their bond buying program or not. Bad economic data makes it less likely they will slow down their bond buying, or if they do, it may be less than originally thought.

Throw in the mess in Syria and it’s a surprise stocks were able to have a positive week.

Here are the weekly, monthly, and annual TSP fund returns through Friday, September 6.

The S&P 500 has bounced nicely off of the August lows, and managed to reclaim the important 50-day EMA. However, it remains below some key resistance levels that will be tested on Monday morning.

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

The market leading Transports aren’t really telling us anything different. If the resistance from this recent short-term downtrend can be taken out, we may have another push to new highs. Otherwise, the downtrend continues.

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

Bonds bounced on the weak jobs report on Friday, but they remain in a down trend after making new lows this past week, and the F-fund ended the week down 0.87%.

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

The Fed’s FOMC meeting is the 17th and 18th of this month, and while Syria will have an impact on the market, the economic data will be under a microscope as investors try to guess whether the Fed will or won’t announce a slow down in their bond buying. Very strong reports may be frowned upon while weak, but not too weak, reports may be more beneficial for stocks, which is why stocks did not go down after Friday’s less than exciting jobs report.

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. We have a new Service in the Premium Services area called TSP Talk Plus. You can read more about it here: www.tsptalk.com/plus.php. We are offering big savings to current subscribers to our other premium services, Intrepid Timer Strategies, and RevShark’s TSP Timing. More info.

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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