It was another constructive week for the TSP stock funds. “Constructive” can sound very subjective but, for TSP investors that utilize Technical Analysis (Charting and technical indicators), the term makes a lot of sense. We didn’t see big price gains this week but, the charts show us that the stock funds are consolidating along their 10DMA lines. Baring a big break down next week, the next move is likely higher for the stock funds…. For the week the C fund was up 0.72%, S fund up 0.16%, I fund down 0.59%, and F fund up 0.41%.
Very Long Term
From a very long term perspective, we are due for a correction to off-set the huge rally we’ve seen since the low in March 2020. When this correction may happen is still an unknown. Last week’s Weekly Update lays out the 2 most likely short term scenarios that are still in play. Either way, the market needs to correct relatively soon. The structure of this correction will tell us the direction of the very long term trend.
Friday gave us a nice bump higher for the C fund. The price opened right on the 10DMA but finished up 1/3% for a new All-Time High. As long at the C fund closing price remains above its 10DMA line, the trend is up. I will feel much better when the price is above 3450 but, I would not be selling the C fund here. The trend is your friend (until it’s not…)
The S fund is riding its 10DMA and a relatively long term trend line. The trend line is pretty important here. A close below this line would be a concern but, the real technical problem is a close below 1500.
The I fund break out from last week IS Still Intact…. Having said that, the 64 level is critical support! Ideally we will not see a daily close below 64. Since the losses this week were on relatively low volume and the technical indicators have not turned negative, the I fund breakout pattern is still in place. We need to see what happens next week before making any decisions.
Bottom Line: Long term we need a correction. Short term, the market CAN still move higher.
It was a constructive week of consolidation for the TSP stock funds. USUALLY, consolidation results in a continuation of the prior trend. In this case, that trend is up… We will see what happens next week. The economic and political backdrop is working against higher prices but, as we’ve always said, “What Should Happen” is just speculation and water cooler talk… Watch the charts!
Have a great week!