TSP Talk Weekly Wrap Up

It was a holiday shortened week with typical pre / post Thanksgiving activity. Volume was light but the bias was up. Post holiday trading can prove tough to analyze since there is a positive bias during the pre-holiday trading and there tends to be reversals after the holiday. So, does that mean stocks are due for a little pullback this coming week, or is this rally unstoppable?

Three out of the four trading days last week ended with faily sharp selling. Not usually a positive sign, but it was a holiday week and who knows what it meant?

Here are the weekly, monthly, and annual TSP fund returns through Friday, November 29…

The S&P 500 (SPY / C-fund) has reached the apex of this rising wedge, and that is unusual since wedges tend to break a lot sooner. The holiday trading could have had something to do with that. I would expect a rising wedge to break down and perhaps the positive holiday bias got in the way? But other indices, particularly the Dow, have made some breakouts to the upside from similar wedges, so will the S&P 500 follow the Dow? The Dow isn’t exactly a leading index.

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

Bonds (F-fund) rolled over late last week after their recent rally. because of pre- / post holiday reversals, I am wondering if the small pullback was the reversal here, and if we’ll see resumed upward movement after the weekend?

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

That is a possibility, but taking it for what it is right now on the chart, it looks like a new lower low in a downtrend. If we don’t see bonds move up on Monday or Tuesday, I would lean toward this being a bearish move. If this chart can get over 102 gain, then I would become more bullish on bonds.

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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