In last week’s Weekly Wrap Up we finished up by saying, “We’ll need a monster month to see the stock funds turn positive again for the year.” Well, we actually had modest losses on Thursday and Friday, the first two days of the new month, but thanks to a strong end to November, the worst Thanksgiving week since 1932 gave way to the best week in 3 years fore the market, and now the S&P 500 and Dow are back in positive territory for 2011.
For the TSP, the C-fund jumped 7.47% on the week, the S-fund gained 8.89%,the I-fund moved up 9.31%, while the F-fund (bonds) added 0.08%, and the G-fund was up 0.03%.
We got a decent November jobs report on Friday as the unemployment rate dropped sharply to 8.6%, but investors either focused on the contraction in the labor force, or they simply wanted to take profits after the 7% rally earlier in the week because the market could not hold early gains into the close on Friday desoite the positve report.
The S&P 500 is in a sticky situation. It seems to have broken out of a bullish bull flag pattern, and that means the flag itself, which was resistance on the way up, should act as support now. The 200-day EMA is also there to help with support. But the reversal day on Friday looks a little negative as we’ve seen similar reversals become short-term tops recently.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This week could be another wild one as the chaos in Europe continues and there are scheduled meetings that could shake things up. Much of last week’s gains had to do with optimism in Europe, but we know how fickle that can be.
After some early strength in December, there is a seasonal lull before the strongest historical seasonal period of the year beings. That lull would start sometime this week as Monday is the 3rd trading day of the month.
Chart provided courtesy of www.sentimentrader.com
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
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