Sunday Update: 16 September 2018
The TSP stock funds made a comeback after last week’s losses but only the C fund managed to finish above the prior week’s close. For the week the C fund was up 1.16%, S fund up 1.02%, and I fund up 2.03%.
This week we’re going to look at 18-month charts, both daily and weekly, for all 3 TSP stock funds. This will give us a clear perspective of the short and long-term trends, resistance areas, and some mental “lines in the sand” for possible reallocations in the future.
The 18-month weekly chart of the C fund shows the very strong run up from August 2017 thru January 2018. Following this rise we had an A-B-C correction thru March 2018. The big price move up during the first week of May 2018 was the beginning of the current ongoing rally. The Actionable Trend Line on the chart is a great mental guide for long-term TSP investors. A weekly close below this line would be the first sign of a potential long-term trend change. As long as the price stays above this line, the trend is in place. Currently the C fund sits about 2% above this line. In addition to the trend line, the primary indicator to watch is the Williams % R (Wm%R). As long as the indicator is in the GREEN we are good to go.
The 18-month daily chart of the C fund shows the same data but with the daily volatility. Wm%R is almost in the green. We SHOULD see a move to new short term highs next week. Having said that, we could absorb a price decline down to the 2850 level before really being concerned. That lower channel line is your mental “line in the sand”…
The 18-month weekly chart of the S fund is similar to the C fund. We are still above a well defined trend line but the price action has been a bit soft over the past 2 weeks. We could see some further consolidation next week but, as long as we close above the 1475 level, the trend is still firmly in place. Wm%R is green and RSI is rising; we’re in good shape.
The 18-month daily chart of the S fund shows a pretty clear base-on-base consolidation that SHOULD result in higher prices going forward. Wm%R has a ways to go to hit the green on a daily basis but, with the RSI rising, we should be in good shape next week. 1460-1475 is the area to watch. A daily close below 1460 is a problem.
The 18-month weekly chart of the I fund is not looking good in the long term but, we are seeing some support here at the 65 level. The problem is the lower highs and lower lows we’ve seen since the May high. A recovery here needs to get above 69 to really be significant to the chart. A weekly close below 65 just continues the down trend. Because of its volitility, the I fund is not really tradable for TSP investors right now.
The 18-month daily chart of the I fund is not much better. You can see the possible support at the 65 level but the channel is clearly down. There is definitely resistance at 67 and we would need the price above the upper channel line to see the beginning of a possible trend change. Personally, I’m staying away from the I fund right now.
Assuming nothing major happens in the market, we’ll refocus to the longer term trends, Elliott Wave count and moving averages next week. Have a great week and stay alert. October is coming…