Sunday Update: 16 June 2019

It was a mixed week for the TSP funds.  Prices didn’t move much but, each of the 3 TSP stock funds is in a unique position from a short term technical perspective.  We’ll take a close look at all 3 stock fund daily charts below.  For the week the C fund was up 0.47%, S fund up 0.34%, I fund down 0.61%, and F fund up fractionally at 0.04%. 

Very Short Term

Below is a zoomed in look at the C fund over the past month.  From the 3 June low, the C fund rallied 180 points and has been in a tight consolidation for the past 5 days.  More often than not, a consolidation such as this resolves in the same direction as the prior trend.  It looked like a breakout was beginning on Friday but reversed at the end of the day.  We SHOULD get a positive resolution from this consolidation but, that could come after another step down next week.  

Short Term

The daily chart of the C fund is the strongest of the group.  The June low took us just below the 200DMA and the recovery took us back above the 50DMA.  We have seen the C fund consolidate above the 50DMA for the past 5 days.  The 50DMA is becoming a floor for the C fund and SHOULD provide support at this level.  

The daily chart of the S fund is not looking good.  Where the C fund is finding support above its 50DMA, the S fund is finding resistance.  The 50DMA is currently acting as a ceiling for further price advancement of the S fund.  We need to see a strong break thru the 50DMA for this rally to continue in the S fund.

The I fund is the worst chart of the group.  The I fund gapped down thru its 50DMA on Friday and is likely headed back down to its 200DMA.  Because the stock funds tend to move relatively together, keep an eye on the I fund.  It could pull the other 2 stock funds down with it…  We see a series of lower highs over the past year.  The June high is lower than the May high which was lower than the September 2018 high; not good.  The next support level is the 200DMA.  If that fails, any close below 63 is a serious problem.  With the technical indicators rolling over, things do not look good for the I fund.  

Bottom Line: The C fund is holding strong against some serious head winds.  While the C fund rose to new all-time highs in May, the S and I funds have not followed suit.  We will focus on this divergence in next week’s post.  If the S and I funds continue lower, they will eventually pull the C fund down with them.  This would be consistent with Possibility 2 from last week’s Sunday Update….

Stand-by for an exciting summer!

Jerry