TSP Talk Weekly Wrap Up

The week had its ups and downs but there seemed to be a floor on the S&P 500 in the low 1740's and once it tested it again on Wednesday morning, it all the bulls needed to take charge again. The weekly gains were not large but we saw new record highs on several indices by the close on Friday.

Here are the weekly, monthly, and annual TSP fund returns through Friday, October 25...

The S&P 500 (SPY) made a new all time high and it has now been up 11 of the last 12 trading days. We have seen these types of prolonged rallies many times this year.


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

The action remains extremely bullish as far as the trend goes, and that is good news for the folks who are more longer-term investors and don't move their money around too often. For the market timers, the indicators are getting extended and it wouldn't be a stretch to expect some kind of a pullback in the short-term.


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

Bonds also look bullish as this AGG bond ETF has created another bull flag above the 200-day EMA after reversing the downtrend a few week ago.


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

Much of the success of stocks, bonds, even gold and other commodities, has been the weakness in the dollar. Dollar weakness has a positive price impact on anything traded in dollars. You can see that the dollar put in a peak on this chart in early September.


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

If scroll back up to the S&P 500 and bonds, you can see that is where we saw bottom being made on those charts. This is being caused by the the Fed's continuing bond buying program, and the recent increase in the debt ceiling. Investors seem to think the recent weak jobs report is another reason for the Fed to continue dumping liquidity into the system and that is reason enough for them to buy for now. That means the dollar will likely trend lower and stocks higher.

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
www.tsptalk.com
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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