After a rough Thanksgiving week, the market ended November with a nice bump to the upside.  For the week the C fund was up 4.85%, the S fund gained 3.52% and the I fund added 1.60%.  If you’re watching the dollar value of your TSP account every day (which I would caution against), you’re probably pretty happy with this weeks move.  In reality, nothing has structurally changed.  The long and short term patterns, moving average lines, resistance levels etc, are still in effect.  There is room for the market to move higher from here in the short term but, in the longer term, the highest probability set-up is not looking good…  

Medium Term

We have been in a very defined channel between 2600 and 2800 since the beginning of October.  In the 3 year weekly chart of the C fund below, you can see that the market is pressing the 50WMA but has yet to find support above this level.  Where it used to act as a floor, the 50WMA is now acting as a ceiling.  The market will continue lower until the 50WMA becomes a floor again…

The S fund is in “no man’s land”, between the 50WMA and the 200WMA.  It could recover from here but, we are most likely setting up for another leg down.  I would not be surprised to be looking for support at the 200WMA by 01/01/2019.

The I fund still has the best chance of a recovery from theses levels.  It looks like the I fund is finding support at its 200WMA.  One more weekly pop and we should see the price up to the 50WMA at about 67.

Short Term

The short term set-up on the C fund does not look good!  We are hitting resistance as the 50DMA crosses the 200DMA; “Death Cross”.  It will be very tough for the C fund to rally beyond 2800 from here before rolling over.  

The S fund is in the same short term boat as the C fund; just further along.  We saw the “Death Cross” on the S fund last week.  Now the 50DMA is a significant level of resistance, followed by the 200DMA.  It will take a good bit of work to turn this ship around without another significant leg down.   

The short term I fund chart is not really that great.  We see lower highs that can’t get up thru the 50DMA.  On the positive side, we have higher lows since late October.  The 50DMA is the key right now.  The I fund needs to close above the 50DAM to start the turn in a positive direction…

Bottom line, we MAY be at a low.  The only way we will know for sure is if we see support at the moving average lines and higher lows on the price charts.  Watch these levels carefully and you will be able to make informed reallocation decisions going forward.  Volatility will continue so, stay tuned…

Have a great week!

Jerry