Hi everyone – It’s your weekly dose of TSP Talk from www.tsptalk.com.
The “Santa Claus” rally got off to an early this year. Officially, the Santa Claus rally includes the final 5 trading days of the year, and the first two of the new year. That means this past Thursday, Christmas Eve, was the first official day.
The market was indeed up on Thursday, but it happened to be the fitfh day in a row that the S&P 500 closed higher. So the question is, can the market continue to move higher during this Santa Claus rally week, after having already been up five consecutive days?
For the week, the small cap fund (S-fund) led the way again with a gain of 3.2%. The C-fund gained 2.21%, and the I-fund picked up 1.83%. The dollar finally stopped moving higher and saw a two-day pullback late last week, helping the I-fund break a two-week losing streak.
The F-fund (bonds) lost 0.95%, and the G-fund picked up 0.05%.
For the month of December, only the F-fund is showing a loss as we have seen bond yields move up (when bond yields go up, bond prices and the F-fund generally go down.) The S-fund continues to shine being up over 8% in December.
Last week’s rally finally took the S&P 500 above its recent trading range between 1083 and 1120, closing the week at 1126. The previous highest close had been 1114.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is a good sign from a technical analysis point of view, but after being up for 5 consecutive days, the Santa Claus rally will have its work cut out for it to keep the steak going.
I hope you all had a Merry Christmas, a happy holiday, and a very Happy 2010 to all.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up. Our market commentary is updated daily on www.tsptalk.com