TSP Weekly Wrap-Up - 03/01/10

Weekly TSP Wrap-up from TSP Talk

If history can repeat itself, we could see a positive start to March

Stocks were modestly lower last week, but February proved to be a good month for stocks; particularly for U.S. stocks.

For the week, the C-fund was down 0.37%, the S-fund slipped 0.35%, and the I-fund lost 0.27%. The F-fund (bonds) had a strong week picking 0.86%, and the G-fund added 0.08%.

For February, all of the funds ended in positive territory. The S-fund led all of the funds with a 4.89% gain. The C-fund was next with a gain of 3.11%, and the I-fund squeezed out a small gain of 0.06%. The F-fund also ended the month in positive territory picking up 0.38% in February, and the G-fund was up 0.24%.

As far as what happens next, we are watching the chart of the S&P 500 very closely as it has been almost mirroring the action we saw in early 2007. Take a look at the two charts. It seems the S&P has just completely the action as market "F" on the 2007 chart.

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

It seems too easy to think we have a road map of what is about to happen, but the similarity is remarkable, right down the action of the moving averages (EMA). The 20-day EMA is the line in green, the 50-day EMA is purple, and the 200-day EMA is blue.

The "rhyme" aside, what we are looking for from here is to see the 20-day EMA (green line) move back above the 50-day EMA (purple). That is a good technical sign for the market for perhaps some short-term positive action.

As I always say, once you find a pattern, the market seems to enjoy taking it away so I am not betting the farm on this playing out the way it appears to be, but I am hopeful that it is telling us that the outcome will be positive for stocks this week.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.

Tom Crowley

www.tsptalk.com

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