New Allocation: 100% G Fund

It was a very rough week for the TSP stock funds.  In fact, it was the largest weekly loss year to date.  What generated this ALERT was not the size of the weekly loss, it was how the patterns were affected.  We’re going to get into the pattern analysis in this weekend’s Sunday Update.  For the purposes of this ALERT, I’m going to lay out my decision process using intra-day charts of the S&P500 (C Fund).  

The chart below shows the C fund since the beginning of June.  The price had been moving up steadily along the short term trend line.  On Wednesday of this week, the C fund broke down thru the trend line on big volume.  This was the first indication of a potential trend change.  By mid-day on Thursday, the C fund had recovered back up to the trend line.  At this point, the line that had been support became resistance.  The C fund rolled over hard on Thursday afternoon and continued its fall on Friday.

The chart below is a closer look at how this played out within the week.  Wednesday’s breakdown thru the trend line was significant but, much of the loss was recovered by the end of the day.  Thursday started out very strong but, once the price recovered to the trend line, institutional investors pulled out.  At 1:30PM on Thursday the C fund went into a free fall that continued into Friday.

Bottom Line: Thursday at 1:30 was the turning point in this rally.  Since it happened in the afternoon, any reallocation made made after this point would not take effect until Friday’s closing price.  While we did absorb losses Thursday and Friday, we moved to the G fund as close to the top as possible within the rules of the TSP.

The Sunday Update will be posted by the end of the weekend and will breakdown the longer term patterns of all 3 TSP stock funds. If you have questions, please post to comments or reach out on email.  

Have a great weekend!

Jerry