TSP Talk Weekly Wrap Up

Stocks bounced around quite a bit last week, and the trend was for strong morning action, followed by some profit taking later in the day, but when it was over, we saw respectable gains for the week. The situation in the Ukraine has investor’s on their toes, but the indices continue to climb that preverbal wall of worry, and February ended its strong month on a high note.

Here are the weekly, the final February, and annual TSP fund returns through Friday, February 28…

The S&P 500 (SPY / C-fund) broke out to new highs this past week, and the rising trading channel remains intact. We had seen this type of action many times in 2013, but the bad news is, more times than not in 2013, once we saw new highs, another pullback was just around the corner. I’ll be keeping an eye on the support from that rising trading channel. Once it breaks it may be time to step aside.

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

The small caps (S-fund) are in a similar situation and we know this angle of incline can’t go on forever – but just how long can it go?

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

March is a tale of two halves historically. The first half of the month is quite solid while the latter half looks to give back some of those early monthly gains. Perhaps the rally can keep going a while longer should history repeat itself, but then again February is a weak month historically, and look what it did. I’m always concerned about how a new month will start after we get big gains in the prior month.

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

Bonds have been performing well, and I believe this is the market that is actually pricing in the situation in the Ukraine.

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

Something has got to give. Either bonds will start to pullback and stocks will resume their rally, or bonds will continue to rally and we’ll see stocks pullback. I don’t think they can both breakout to the upside together.

Good luck, 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. If you need some help figuring out what to do, perhaps one of our premium services can help.

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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