TSP Talk Weekly Wrap Up

The week started out with a steep sell-off with the Dow losing 179-points on Monday. There was a snap-back rally on Tuesday and into Wednesday, but by the end of the week the results were mixed. Bonds had another positive week and continue to lead the way in 2014.

Here are the weekly, monthly, and annual TSP fund returns through Friday, January 17…

The S&P 500 (SPY) flirted with the December 31 high this week but could not end the week at new highs. The trend remains up and while stocks are very overdue for a 10% correction, this chart shows us what a bull market looks like.

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

Earnings season has kicked off and so far they have come in slightly below average as far as how many companies are beating estimates, versus how many are missing them. Earning are the life-blood of the stock market so if earnings are on the disappointing side, we could see that elusive correction.

The Dow, which is a more narrow, but broadly followed index containing the largest companies in the U.S. markets, has lagged a bit and has not made a new high yet this year. The chart formation looks like a healthy consolidation and I’d be surprised if we don’t see new highs soon, but the longer it drags on without a new high, the more concerned the overly bullish investors may become. There are some sign of extreme bullishness in not only sentiment surveys, but also in the amount of money being borrowed (called margin) to buy stocks. This is a red flag.

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

Bonds (Ffund) have come to life this year after bottoming at the end of 2013. The TLT bond ETF shows that the 20-day EMA is crossing above the 50-day EMA, which is a bullish sign, but could also be a sign of being a little overbought in the short-term.

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

There is some overhead resistance, and a couple of open gaps below on this chart (red boxes) that may look to get filled.

From the tsp.gov website: “Holiday Closing: Some financial markets will be closed on Monday, January 20th in observance of the Martin Luther King, Jr. holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 20th) will be processed Tuesday night (January 21st), at Tuesday’s closing share prices.”

Good luck, thanks for reading, and
have a great holiday weekend! 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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