We saw a bit of a set back for the market, with the S&P500 (C fund) losing 1.24% for the week.  Importantly, all 3 of the TSP stock funds were down.  If we take a look at the 2 year trend that began back in early 2016, we can see that the consolidation continues to play out along the trend line.  This line is going to become very important over the next couple of months.  As the consolidation continues, a close below this line would be a serious problem for the long term trend.  Watch it closely over the next couple of months!

Long Term

The 2 year weekly chart of the C fund below shows the consolidation in context.  It certainly looks like we are in the 4th step.  Once the 4th step (consolidation) is complete, we SHOULD see another run to new highs.  In the near term however, I would expect continued volatility.  While prices have rebounded significantly off of the February lows, multiple high volume down weeks is definitely a concern.

 

Short Term

The 6 month daily charts of all 3 TSP stock funds look pretty similar.  All 3 have recovered pretty substantially off of their February  lows.  Their respective 50DMA is going to be very important going forward.  

In the C fund chart below, 2 attempts have been made to break out of the grip of the 50DMA.  So far, the market has not been able to get clear and currently sits right on the 50DMA.

The S fund chart below looks stronger than the C fund chart.  It’s recovered closer to its all time high and SEEMS to have broken out of its 50DMA.  We want to see the 50DMA act as a floor now vice a ceiling like February.

The I fund is having a tough time.  It cannot seem to get above its 50DMA.  I’m watching the I fund carefully! Since it lead the initial drop in January, I’m looking for it to lead the market back down to test the lows near the 200DMA.

We are definitely in a wait and see mode.  Since the C fund settled right on the 50DMA on Friday, we should get some kind of breakout (one way or the other) this week.  We are definitely not out of the woods yet!  Stay tuned and have a great week.

Jerry