Sunday Update: 01 December 2019
After last week’s pause, the rally continued this week for the TSP stock funds. Although shortened due to the Thanksgiving holiday, and Friday’s losses didn’t help, overall we benefited from strong price gains. For the week the C fund was up 0.99%, the S fund up 1.74%, and the I fund up 0.29%.
December has historically been one of the strongest months for the market. According to the Stock Trader’s Almanac, December has been the best month for the S&P500 (C fund) since the 1950s! Having said that, we need only look back to last year to realize the market does NOT always go up in December…
In the short term, we could be hitting some resistance at the upper channel line. The key to the 8 month daily chart of the C fund below is the 10DMA (Day Moving Average). A daily close below the 10DMA LIKELY means we are headed back town to the lower channel line. The technical indicators look very toppy here so, watch carefully for the next 2 weeks. A few solid days above the upper channel line would get us out of this pattern.
Long term, the C fund is in very good shape. The C fund gaped up through the upper trend line 4 weeks ago and has progressed steadily higher. This upper trend line should act as support for prices during the next consolidation.
The S fund has clearly broken out of its consolidation and is making a run at its prior all-time high. We could definitely see some resistance at the S fund attempts to push through 1500 but, RSI has room to move higher and momentum us improving. I expect we will see new highs before a serious correction.
The I fund has been in a tight consolidation for the past 4 weeks. This is USUALLY a very bullish sign. The I fund is also making a run at its prior all-time high. This 4 week consolidation pattern COULD be the spring board to launch prices to new highs.
Bottom Line: While there is always risk, and certainly short term headwinds, these charts look very strong. Watch that 10DMA line on the C fund…
Have a great week!