Sunday Update: 10 November 2019

We just completed the 5th consecutive week of gains for the TSP stock funds!  For the week the C fund was up 0.85%, S fund up 0.55%, and the I fund gained 0.53%.  The big picture (weekly basis) hasn’t changed; if anything, it’s strengthened.  This week’s gains came on trading volume greater than last week.  Increasing volume as prices increase is a very good sign.  It means an increasing number of people are buying into this rally…   In the short term (daily) we are due for a pause.  The daily charts are showing us signs that the pause may be imminent…. 

C Fund 18 Months Weekly

The chart below is very strong.  Increasing prices on increasing volume is definitely what we want to see.  The MACD, on a weekly basis, has only been positive for the past 2 weeks.  Price advancement is likely to continue on a weekly basis.  The only area of concern is the distance from the current price to the 50WMA.  3093 to 2849 is approximately an 8% move to the downside.    

Short Term

In the short term the C fund has room to move higher.  We are in a pretty well defined channel on a daily basis.   We should have another 50+ points of upside available before resistance at the upper channel line.  At that point, a pause in price advancement is likely.  Look at the price action in July.  The price hit the upper channel line 3 times and then rolled over hard.  We DO NOT want to absorb the kinds of losses we saw in late July/early August.  Watch the MACD closely…  

The S fund is in a struggle to break out of this consolidation.  We need to see the S fund up in the 1475 area to really be out of the consolidation range.  As the S fund is approaching upside resistance, the MACD is starting to turn down.  IF it turns negative, the S fund will likely not make it to 1475 without a bit of a pause…

The I fund has come a long way since early October and is rapidly approaching its early 2018 high at approximately 72.  Pushing past this level will be an important milestone BUT, we may need a pause in price advance before we get there.  Like the S fund, the I fund’s MACD looks like it’s starting to roll over.  IF it turns negative, we will likely see a pause in the I fund advance before it pushes to new all-time highs.  Watch the MACD…

Bottom Line: Same as last week.  The weekly charts look strong but we should see a pause on a daily basis soon…  The key here is pause, not a significant correction.  More to follow on price levels to watch as the pause plays out.

Have a great week!

Jerry