Alert Analysis 
June 5, 2023
"One of the oldest adages on Wall Street is “Don’t Fight The Tape!”. There is every reason in the world to believe that this market SHOULD be going lower but, that is NOT what’s happening. This is why technical analysists don’t focus on the WHY; we focus on what IS."
The above quote is how we began the Alert Analysis on 19 May 2023. It is even more relevant to this Alert Analysis! Every macroeconomic indicator and gut instinct is telling us that this market SHOULD be moving lower!! And yet, we had a monster breakout to the upside on Friday... Everything in me wants to take profit BUT, price action is telling us just the opposite!
From a long term (weekly) perspective, the C fund has found support at each test of the 20WMA since late March. While price has been relatively flat for the past 10 weeks, this weeks breakout confirms this rally.



On a daily basis, the C fund broke out of a classic Cup & Handle pattern on 18 May. That was what generated the last Alert. Since then, price pulled back for a retest before exploding higher this week. While there are no guarantees, this is a very strong chart with RSI and MACD both confirming this move.

We are not out of the woods just yet. The August 2022 high still looms as potential resistance but, the Bulls are clearly in control of this market.




On a weekly basis, the S fund has been consolidating along the trend line for the better part of the past year. This week we saw an explosive move off of support and a buy trigger is now in place. We need to see improvement in momentum (MACD) but, RSI and MACD both confirm this move in the S fund.



In last week's Newsletter, we discussed the Head & Shoulders pattern of the S fund and the possibility of a failure of that pattern. Friday's price action seems to have given us that pattern failure! The S fund has been consolidating along the trend line since early March and Friday's breakout cleared all of that consolidation. The next important resistance level is the January high at 1840.



The I fund moves inversely to the U.S. Dollar almost 100% of the time. This calls into question Friday's huge move higher while the dollar also rose. If the dollar continues its advance, the I fund will be under serious pressure going forward. On the other hand, if the dollar rolls over, the I fund advance will continue. This chart is not as strong as the C and S fund charts which is why the I fund is not part of the new allocation.



While the F fund closed higher for the week, Friday's decline shows that the long term down trend of the F fund is still in place. There is no reason to have any F fund exposure at this time.



Bottom Line

Grow My TSP uses Technical Analysis as the sole methodology for making reallocation decisions. While macroeconomic conditions are bad and worsening, the market is setting the stage for a powerful move higher. In addition, as we discuss in this Sunday's Newsletter, the long term trend as defined by the 20 week and 50 week moving averages is up.

To grow your TSP account, you need to respect price action and trend, regardless of external conditions. We have no way of knowing how long the current up trend will last but we will be able to identify it when it reverses. Until then, Don't Fight The Tape!

New Allocation: 50% C Fund, 50% S Fund


GrowMyTSP.com does NOT provide personal investment advice. The Alert and Analysis are designed for you to make your own reallocation decisions based on your personal circumstances and risk tolerance. This Alert analysis details the current allocations within the “Grow Model Portfolio”. You can follow along with these allocations or use this information to make your own reallocation decisions.
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