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.
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!