It was a VERY tough week for the TSP stock funds. The C fund gave up all of its gains from the previous week and closed well below its 10DMA (Day Moving Average). On the positive side, the C fund did find support at its 200DMA. For the week the C fund was down 4.78%, S fund down 6.18%, and I fund down 3.95%.
This week we’ll step back and look at the big picture of the C fund with a 3 year weekly chart, then focus on the 5 month daily chart of each TSP stock fund.
As difficult as this week was, it is not necessarily an end to the rally that began in late March. In the 3 year weekly chart below we have weekly price, 10WMA (Week Moving Average) line in blue, and 50WMA line in red. Over the past 3 years, price has found support at the 50WMA every time it was tested, with the exception of late 2018 and early 2020. This is a critical support level! This week the price tested that level and found support. If the rally is going to continue, the C fund needs to stay above its 50WMA.
On a daily basis, all 3 of the TSP stock charts look similar. They all gapped down on Thursday and recovered a bit on Friday. The distinction for each is where the price closed for the week with respect to their moving average lines.
The C fund had a strong run last week after breaking thru its 200DMA (Green line). This week, it gave all those gains back. Fortunately, it did find support at the 200DMA. For the rally to continue, we need to see the price stay above its 200DMA. Ideally the 50DMA (Red line) will continue higher and break thru the 200DMA line. This would be a very bullish sign for the rally in general.
The S fund gapped down on Thursday, closing below both its 10DMA and 200DMA. Friday’s recovery was very constructive, pulling the price back up to its 200DMA. As in the C fund, we really want to see price find support at its 200DMA. The next support level is the 50DMA (Red line), approximately 8% lower from here.
The I fund gapped down on Thursday, closing well below both its 10DMA and 200DMA. Friday’s recovery was strong but not enough to push the price back above either of these moving averages. The 10DMA and 200DMA could now act as resistance for the I fund.
Bottom Line: One day does not make a trend. Thursday was a very rough day but, the markets recovered some on Friday and found support at critical levels. We will likely find out next week whether this pull-back is a pause in the rally or the beginning of a new leg down… Stay tuned. Things can get very ugly for the market during the summer!
Have a great week!