It was a strong week for the TSP stock funds, and hopefully a turning point in this correction that’s been going on for the past 6 months. For the week, the C fund closed up 1.52%, the S fund was up 2.44%, and the I fund was up 0.91%. Friday was the big day this week. We saw support levels hold and a nice price move on all thee TSP stock funds. Volume was not great but, the holiday week certainly had something to do with that. While one day does not make a trend, we COULD look back on Friday as the turning point of the market in 2018… So what happened and why could this be the turning point? The charts below say it all..
The C fund was forming a Head & Shoulders topping formation, with the left shoulder the consolidation in May, the head in June and the right shoulder forming from late June thru this Thursday. Friday’s price jump crushed this pattern! The neckline would have been 2700 where the 50DMA and 200DMA were likely to meet sometime next week. 2700 was the focal point but the market went the other way, big time, on Friday… Support at the 50DMA held and we saw a strong price jump. Combine that with the technical indicators turning positive and we’re looking at a great time to put some money to work in the TSP stock funds. * A close below 2700 would be a game changer.. *
The S fund chart looks even better than the C fund! The S fund found support at its first test of the 50DMA following the breakout from the triangle consolidation. This is a great looking chart and I expect to see new highs being made on the S fund this coming week.
The I fund found support at its lower channel line and looks to be fighting its way back. Going forward, the I fund will have some challenges getting back above both its 50 and 200DMA. The moving averages work either as a “floor” providing support to prices, or as a “ceiling” providing resistance. Once the moving averages turn negative, it can be tough to get them turned back around. Having said that, the technical indicators are turning up and the C and S funds will help to pull the I fund up. Expect to see some resistance at the 68.50 level…
One day does not make a trend! I’m not ready to call the correction over but, the short term charts look good. I would like to see prices continue higher ON BIG VOLUME. At some point, we need to see volume pick up. If not, this rally won’t last long…
Have a great week!