It was quite a week for the TSP funds. The market flipped from potential collapse to confirmed breakout! In the end, the I fund led the way, up 2.94%! The C fund did well, finishing up 1.23%. The F fund also finished in the green, up 0.26%. The big disappointment was the S fund which finished down 1.48%.

This was not the newsletter that I expected to write this weekend. I had some expectations for the market this week and they were clearly not met… This is why we respond to the market rather than attempting to predict.

The Daily Charts

The C fund has consolidated in a flat base since mid-April. On Tuesday of this week the market gave the Bulls a serious gut check with an intra-day low testing the lows from mid-April. With Tuesday’s close below the 10DMA, it looked like price was headed down to test the 50DMA. By Thursday, price was back above the 10DMA. Friday was a clear breakout day, closing near the top of the day’s trading range and at a new all-time high. It looks like a summer rally is underway, at least for the C fund…

The S fund, on the other hand, is not faring as well. The S fund is still in the midst of a consolidation that began at the high in early February. With Friday’s support at the 50DMA, the S fund has a chance to move higher with the C and I funds. We want to see a close above the 2250 level and keep the 10DMA from crossing down thru the 50DMA…

The I fund is clearly in rally mode! This week we got support at the 50DMA and a gap up thru the 10DMA on big volume. The I fun has been lagging the C and S funds for years. It will be interesting to see if this is the beginning of a long term breakout for the I fund.

The F fund put in a big reversal on Friday but finished the week above its 10DMA line. The F fund has been quite volatile and I would expect that to continue. Every time the FED chairman or Treasury secretary makes a statement, interest rates go a bit haywire before settling back down. With rates in the news almost daily, the F fund is likely in for a volatile summer.

Bottom Line

The market is back in rally mode! The only question is how much to reallocate to which TSP stock funds… I will be reallocating back into the stock funds tomorrow. Be watching for the Alert which will post early tomorrow morning.

Have a great week!

Jerry