TSP Weekly Newsletter: 26 February 2023

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It was a rough week for both stocks and bonds. At Friday’s close, the C fund was down 2.67%, S fund down 2.94%, I fund down 2.81% and F fund down 0.89%. This was the worst week for the market so far in 2023.

It was also a very busy week for us at Grow My TSP! We posted an Alert and update to the Grow Model Portfolio on Tuesday morning. That reallocation to the G fund was effective for Tuesday’s closing price, shielding us from the further losses throughout the week. We also posted a Market Update on Thursday after the close. Even with Friday’s sell-off, nothing changes with respect to the Market Update. The price of the C fund is still within the support zone of 3930 – 3980. If you haven’t read the Alert Analysis and/or the Market Update, please read them this weekend. They are both still very timely!

For the podcast this weekend, we are posting an interview that Jerry hosted with Chart Master Jim “Bart” Bartelloni. Bart is a legend in the Technical Analysis world! He was very generous with his time, covering building charts, identifying patterns and managing risk. It’s a great interview that you don’t want to miss!

Since nothing has changed in the charts since Thursday’s Market Update, we’re going to review part of Larry Williams forecast for the remainder of 2023, and a potentially very profitable trade idea from Bart’s recent email.

We’ve discussed Larry Williams (ireallytrade.com) numerous times over the past few months. Larry is one of the few analysts that was calling for a significant bottom in October 2022, along a very strong December and January 2023. He also called for a weak February. So far, his forecast has been right on! Where does he see the market going for the remainder of 2023?

The chart below was taken from Larry’s “Forecast 2023” which can be purchased at ireallytrade.com. The chart shows the expected trajectory for the market this year. The magnitude of the moves are NOT to scale. What’s important in this chart is the direction and timing.

Consistent with the forecast chart, we saw a nice rise in stocks from mid-December to early February. The chart calls for weakness in February and a resumed up trend from early March through early May. This should be the last strong rally of 2023. The month of June and mid-August to early September are potential recovery rally time periods. Again, the amplitude of the moves in this chart are NOT the focus. What’s important is direction and timing.

When we showed this chart in early January, it was significantly at odds with the majority of analysts forecasts. The vast majority of analysts called to the market to collapse in the the first half of 2023 and recover strongly in the second half. Larry’s forecast was essentially the reverse, and has thus far proved correct.

Ps. Larry’s forecast is now lining up with the majority of analysts REVISED forecasts…

The complete “Forecast 2023” can be purchased at ireallytrade.com. It’s well worth the investment!

Bart’s Take on Natural Gas

Bart publishes a newsletter at BartsCharts.com. His most recent post is on Natural Gas futures. It’s a great example of measured moves, pattern recognition, and the relationship between price and time. Patterns repeat over, and over, and over again. There are no guarantees that this pattern will repeat but, the upside potential is HUGE and the downside risk is clearly defined and minimal.

If you want to take advantage of this pattern, the easiest way to buy Natural Gas is U.S. Natural Gas (ticker symbol UNG). You’re welcome!

If you’re interested in “Advanced Pattern Recognition”, sign up for Bart’s free newsletter at BartsCharts.com.

The TSP Fund Charts

Following Tuesday’s price collapse (big red candle), the C fund has drifted lower to test support at the 200DMA. Friday’s late day reversal is a bullish sign but, the technical indicators are showing no sign of a bottom. MACD is expanding to the downside and RSI is lower than Tuesday’s low and declining. The bulls have to step-up big time next week or support will fail.

The S fund is well above its 50DMA and 200DMA lines which means price can easily continue down to those support levels. Like the C fund, the technical indicators of the S fund show no signs of a bottom.

For the past several weeks, we’ve discussed the significance of the I fund hitting a brick wall of resistance at the 61.8% retracement level. On Friday, the gentle roll over collapsed below the 50DMA. Technical indicators look worse on the I fund than the C or S funds.

Maybe the F fund is trying to put in a double bottom at 97? MACD is beginning to turn up but, RSI was rejected at the RSI moving average line today.

Bottom Line

The charts do not look very strong as of Friday’s close but, they have not completely collapsed. The C fund is struggling to hold support. If it does, perhaps Larry Williams will continue to be correct and the rally will continue in early March. We have to remain open to that possibility unless the 200DMA is violated. It’s an exciting (and stressful) time to be a technical analyst and TSP investor!

Have a great week!

The Grow My TSP Team