Sunday Update: 18 February 2018
The wild ride continues but in the Up direction this week! In last weekend’s Sunday Update we started out with a 20 year chart of the C fund and pulled the perspective to a 6 month view. This week it’s all about the 6 month perspective for all 3 stock funds. Where does the market go from here? No One Knows… However, the tools below WILL help you make informed decisions going forward.
Below is the 6 month chart of the C fund from last weekend’s post. It shows the price chart finding support at the 200 Day Moving Average (DMA).
The next chart is updated thru Friday. You can see that the support line held at the 200DMA and the price ran back up to the 50DMA. Where the 200DMA acted as a “floor” for falling prices last week, the 50DMA is acting as a “ceiling” for prices this week. We want the price chart to close above the 50DMA, find support there, and breakout to the upside. If this happens, then we will likely keep moving to new all time highs. If the 50DMA continues to act as a ceiling, we could see the price chart fall back.
All three of the TSP stock funds are moving in tandem, at least with respect to the technical analysis of each fund. All 3 funds found support at their respective 200DMA last week and hit resistance on the upside at their respective 50DMA this week.
The Trend Line is another very important technical analysis tool. In the 2 year weekly chart of the C fund below, we can see that the price did find support at the trend line. We want to see prices stay above this trend line! Ideally, we will see a couple of weeks of sideways movement along this line followed by an upside breakout. This will confirm the long term up trend. If the price chart falls hard and closes below this line, the long term up trend would be in serious jeopardy.
As we’ve often said, no one has a crystal ball. No one can “predict” which way the market will go. The goal is not to predict. The goal is to manage risk and maximize our TSP accounts. The tools are all here for making knowledgable decisions. Use the tools rather that Hoping or Believing. It will help you sleep much better at night!
I have a TSP account just like you. My goal is the same as yours, manage risk and grow my account as quickly as possible. If you want to know when I reallocate within my personal account BEFORE I do it, hit the link here.
Have a great week!