Weekly Update: 05 July 2020

It was green across the board this shortened holiday week.  By Thursday’s close the C fund was up 4.02% for the week, S fund up 4.18%, I fund up 2.12%, and F fund up 0.34%.  Historically, the several days before the 4th of July weekend tends to be positive for the stock market.  This year certainly did not disappoint.  More importantly, this week’s price advance came off of support at the 10WMA (Week Moving Average); a very bullish sign.

Long Term

From a weekly perspective, the S&P500 (C Fund) is looking very strong.  Price has found support at the 10WMA each of the past 3 weeks.  This is the first significant price consolidation that we’ve seen since the rally began in late March.  As you can see in the chart below, the S&P500 moved from the low of 2200 to the high of 3200 with barely a pause.  Price hit resistance at 3200 and reversed back down to 3000 4 weeks ago.  Since then, price has been supported at 3000.  At this point, a weekly close below 3000 would be a serious red flag following 4 weeks of support at that level.

Short Term

From a daily perspective, the C fund has found support at its 200DMA (Day Moving Average).  Wednesday’s close above the 10DMA, and Thursday’s additional advance, greatly increase the chances of higher prices going forward.  The only negative in this chart is Thursday’s reversal.  After gaping up at the open and advancing close to 2%, the C fund reversed and closed the day near the bottom of the day’s trading range.    

The S fund chart below is very similar to the C fund chart above.  The S fund closed above its 10DMA on Tuesday, with prices continuing higher on Wednesday and Thursday.  Like the C fund, the S fund reversed on Thursday, finishing at the bottom of its daily trading range.

With Thursday’s gap up, the I fund has established 2 points necessary to draw a trend line.  The I fund price is currently above its 10DMA, above the trend line, and the technical indicators are turning positive.  All good signs…

Bonus

If you are a subscriber to the site, you received an ALERT on Thursday morning that detailed my new allocations.  On Friday you logged into the Member Dashboard for the full explanation of the ALERT that included the chart below.  I created this chart just after the market opened on Thursday morning.  As you can see, the price gaped up on the open and is clearly out of the triangular consolidation pattern.  This was the crux of what generated the ALERT.  We will discuss this in detail on Sunday night at 6:30PM.  Tune in on the FaceBook page for the Weekly Update Show on FB Live!

Bottom Line: All 3 TSP stock fund charts look strong.  I would keep a very close eye on the 3000 level of the S&P500.  A weekly close below 3000 would most likely push me back into the G fund.

Have a great week!

Jerry