Stocks managed to produce gains but pulled back from highs earlier in the week; now investors are questioning whether this is the beginning of the end for the relentless upside. Earnings season is winding down with slightly disappointing results, trade talks with China have been postponed, and poor economic data coming out of Europe contribute to the bearish sentiment among investors.
However this bearish attitude has been floating around since before mid-January, and the indices have continued to be resilient. This was true for the action this week as well. Stocks rallied into the close after an early sell-off both Thursday and Friday providing evidence that traders, human and computer, have money to put to work and see these pull-backs as opportunity. This is what kept U.S. stocks in positive territory for the week.
There are still bullish arguments out there for stocks, but it’s clear we are entering a period of greater uncertainty. Conditions can turn around in the blink of an eye as we saw a year ago. For those who have profited off of the action so far this year, it may be time to re-evaluate their position to ensure they solidify those gains.
The F-fund continues to grow steadily adding another 0.38 percent for the week. The S-fund outperformed the TSP funds with a gain of 0.54 percent. The I-fund lagged with the only loss for the TSP funds as it fell 1.38 percent for the week.
Here are the weekly, monthly, and annual TSP fund returns for the week ending Feb. 8:
The SPY (S&P 500 / C-fund) fell out of its rising trading channel Thursday but was kept to its 200-day EMA for the lows from there. The price now has both support below and resistance above. Earnings are mostly finished so it’s hard to say what to look for to be the catalysts in large caps next week. The C-fund gained 0.11 percent for the week.
The Dow Completion Index (S-fund) rose above its 200-day EMA early in the week but pulled back after running into the high of November. There is support above and resistance for this index as well but will have more earnings coming in next week to influence movement than large-cap indices. The S-fund led the TSP funds for the week with a gain of 0.54 percent.
EFA (EAFE Index /I-fund) was the victim of poor economic news about growth ending its upward climb and falling back to its 50-day EMA, which held as support. An open gap was produced in the midst of the decline this week. Now we will see if investors will come back despite the poor reports. The I-fund lagged the TSP funds with a loss of 1.38 percent for the week.
AGG (Bonds / F-fund) continues to grow and though gains are a fraction of what’s been seen in stocks the chart has been steadily rising for months. The lows and highs were all in unison with the trend lines established in the short-term. And though the trend has been up, the support and resistance are in an apex formation and are about to cross paths. More support below from the 20-day and the growth momentum lately make this an attractive chart and a pullback would suggest to me a good buying opportunity. But a shakeup in stocks could raddle this index with it. The F-fund was up 0.38 percent for the week.
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 the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
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