It was a breakout week for the TSP stock funds!  There’s no telling how much higher this rally will go but, it certainly looks like it will not be stopping in the short run…  Having said that, on Wednesday this rally became the LONGEST in U.S. History!  It began on 9 March 2009 and has been moving on an upward trajectory ever since (3,455 days)!  This doesn’t necessarily mean anything but, it is a good data point to keep in mind…  For the week, the C fund was up 0.86%, the S fund was up 1.79%, and the I fund was up 1.42%.

Long Term

Assuming the C fund can push thru to new all-time highs, the next 6 months or so COULD play out something like the chart below.  This is just a guide based on a possible Elliott Wave count.  The most important feature of the chart is the long term trend line.  The rally is in play until we get a weekly close below this line…

Short Term

In the short term, the C and I funds are bumping up against some significant resistance but the S fund is clear to move higher.  The C fund technically closed at a new all-time high on Friday, besting the January top by 2 points.  Having said that, we’re definitely within the prior top range of resistance and approaching the upper channel line.  With volume pretty low and MACD not moving strongly in either direction, it’s hard to see an explosive move to the upside from here…

2 weeks ago, the I fund broke down below the lower channel line and took out the February low.  Since then it has recovered back to the 50DMA but found resistance there this week.    A strong breakout next week thru the 50DMA would be a sign of possible strength.  If the I fund rolls over at the 50DMA, new lows are very likely.    

The S fund has been setting up a bullish triangle pattern for the last couple of months and finally broke out on Tuesday.  This is a “text book” breakout where the pattern is clearly discernible, a big price jump clearing 2 months of resistance, and indicators turning up to support the price move.  With no resistance and lots of room on the RSI before it becomes over bought, the S fund should move higher over the next several weeks/months.  

It was a productive week for all 3 TSP stock funds.  As summer rolls to an end we could see volatility start to pick up over the next couple of weeks.  September and October are notorious for market crashes so, stay alert.  

Have a great week!

Jerry