It’s another weekly recap and another week of records for the TSP stock funds!  Seemingly nothing can slow this market down.  Since the beginning of 2018 the C fund, which has been out performing the S and I funds, is up 7.5%.  IF there is in fact such a thing as the “January Effect”, 2018 could see continued BIG moves…  

Having said that, the slope of the trend line since the beginning of the year is not sustainable.  What that means is that we should expect to see some serious price swings this year.  We are already seeing that on the upside but, what goes up also comes down.  By the end of 2018 prices could be much higher but, it will likely be a rocky road to get there…

The 2 1/2 year, daily chart of the I fund below is a good example of how we can use trend lines to manage expectation and identify likely support levels when the market eventually corrects.  

 

We have some good supporting trend lines in the C fund 6 month daily chart below as well.  At some point, the shortest trend line will be broken and the next expected support level will be the medium trend line.  However, this is unlikely to happen any time soon as we saw a strong break to new highs on Friday!

The S fund is under performing year to date with a gain of 5.3%, shown in the chart below as the only fund that is not currently at new highs.  There are many reasons for this but, the fact remains that large cap (C fund) stocks are out performing small cap (S fund) stocks.  

The I fund got spooked a bit on Thursday but rallied back to new highs on Friday.  The I fund is sitting on a 7% gain year to date, slightly trailing the C fund.   

No matter how you slice it, the TSP stock funds are the place to be right now!  There is no way to know how long this rally will last.  What we want to do is stay alert and have a game plan in place for when the market does finally reverse course.

Please post questions to comments and have a great weekend!

Jerry