What started off as another week of all-time highs ended badly for the TSP stock funds… For the week the C fund was down 1.25%, S fund down 0.30%, I fund down 1.36%, and the F fund up 0.53%.
As we’ve talked about for the past several weeks, the 10DMA (Day Moving Average) on the C fund is the important guardrail right now. As of the close on Friday, the S fund is the only TSP stock fund still holding above its 10DMA.
This weekend we’ll take a look at the 6 month daily charts of the 3 TSP stock funds and the F fund. Taken together, these charts give us a good indication of where the overall market is going in the relatively short term.
The chart below shows the importance of the 10DMA. When prices are supported by the 10DMA they trend higher. When prices are below the 10DMA they tend to move lower. The trend is your friend, until it’s not…
A breakdown thru the 10DMA does not guarantee an extended down trend but, every extended down trend begins with a breakdown thru the 10DMA. Friday’s close below the 10DMA may be the beginning of a longer consolidation or just another head-fake in this extended bull market. We’ll know within the next week or 2.
The S fund chart below is very similar to the C fund. The big difference is that the S fund did not close below its 10DMA this week. IF (and this is a BIG if) the S fund can stay above its 10DMA, there is a chance it could pull the C and I funds back up. I’m not expecting this but, it is possible…
The I fund is showing the worst technicals of the 3 TSP stock funds. There is really nothing positive to say about this chart so, let me list a few of the negatives:
- The high of mid-February is lower than the high of mid-January
- The 10DMA crossed the 50DMA in early Feb, tried to find support, and crossed down again this week
- Volume on down days this week was relatively high
- Indicators are headed lower
If the I fund does not find support at the prior low (57.25), look for support at the 200DMA.
The F fund has been very strong since breaking out of its sideways consolidation in late December 2019. Following a short bullish triangle consolidation this month, the F fund gapped up to new highs on Friday. We want to see volume increase on up days going forward. Right now, the F fund is the strongest of the TSP funds.
Bottom Line: This post focused on the short term (6 month) charts. From this time perspective, the stock funds are going to be very challenged going forward. Look for support at the C fund 50DMA and I fund 200DMA.
Have a great week!