TSP Talk Weekly Wrap Up

Stocks rallied sharply on Wednesday last week, after the Fed announced no tapering to their bond buying policy at this time . The bulls loved it, as you can see on the chart below, but we saw the indices give back some of the gains on Thursday and Friday.

Here are the weekly, monthly, and annual TSP fund returns through Friday, September 20 – green, green, and mostly green.

The S&P 500 broke out to new highs this week, has since pulled back, and will likely test the old high support line next week (black). There are still two open gaps (red) that will want to be filled, but will the bulls allow that much of a pullback before they jump back in?

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

The longer-term chart shows that the S&P 500 stalled at the top of a parallel trading channel and the question now is, how much of a pullback will we see? Will the 20 and 50-day EMA’s be tested? Will we see a test of the prior low? Is it possible that we test the bottom of the trading channel where the 200-day EMA is?

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

Bonds and the F-fund rallied on the Fed news as well, as bond yields dropped. The descending resistance line was broken last week and there’s a new rising support line created when this IEF bond fund moved above the late August high.

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

With the Fed tapering off the radar, all eyes will be on Congress and the continuing resolution and debt ceiling negotiations. The longer these go on, the more likely that we see fireworks in the stock and bond markets.

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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