Sunday Update: 30 April 2017

Current Allocation: 34% C Fund, 33% S Fund, 33% I Fund

It was a huge week for the TSP stock funds!  All 3 funds were up big on Monday following the French primary elections last weekend.  The C and I funds were able to hold most of the gains for the week but the S fund reversed and finished the week where it opened on Monday morning.  The short term trend has changed but, in the bigger picture, we are not out of the woods yet…

Short Term

The S&P500 (C Fund) gapped up on Monday, changing the down trend we have seen since the beginning of March, and creating the lower limit of the current trading range.  On Wednesday, the S&P hit the prior high at 2400 before reversing and creating the upper limit of the trading range.  One of 2 things will happen from here.  The market could continue to push to new highs without a significant pause OR, we could see a decline over the next few weeks to the lower channel line.  Fortunately the trading range is only 3.6% wide.  If you followed the alert sent out last Monday, then your risk is just over 2%.

The 2 important numbers to watch right now are 2405 and 2320.  Generally speaking, if the S&P500 closes above 2405, we are good to go.  If it rolls over and closes below 2320, then it’s back to the G fund.

Long Term

The C fund gapped up out of an 8 week consolidation.  This is a very positive sign BUT, it did get stopped at the prior high of 2400.  As you can see in the chart below, we usually get several positive weeks following consolidations.  We want to see a strong follow thru next week that takes us to new highs.  Volume was pretty good last week and the indicators are pointing up so, I’m cautiously optimistic.

The S fund gapped up but then reversed hard by the end of the week.  Reversals like this do not inspire confidence at the beginning of a new rally…  We’ll be watching the S fund closely going forward.

The I fund enjoyed a huge gap up last Monday.  The I fund jumped about 2.5% and kept most of those gains thru the week.  The I  might find some resistance at the prior high of 65 but it’s got a lot of momentum to continue up.

It looks like we’re in a trading range for the time being.  Fortunately the range is pretty tight at 3.6%.  Because we only get 2 moves per month, and Monday is the 1st day of the month, I plan to hold the current allocations unless the S&P closes below 2320.

Have a great week!

Jerry