TSP Talk Weekly Wrap Up

Stocks opened higher last week, but sellers stepped in taking advantage of the light volume trading. Whether it was profit taking or investors selling losing positions for tax purposes, the market gave way at the end of the year, and couldn’t rebound on Friday – the first trading day of the year.

Here are the final returns for December and the 2014 annual returns. Obviously, choosing the right fund made a big difference in 2014 and none of the L-funds were able to beat the returns of the C, S, and even the F-fund.

And here are the weekly and early monthly and annual TSP fund returns for the week ending January 2nd:

The SPY (S&P 500 / C-fund) saw the neckline of the large inverted head and shoulders pattern fail to hold as support after closing above it for 6 straight days. There is an open gap near 201 that could be the short-term target on any further downside, but the real concern is if this inverted H&S decides to test the middle of the head, and they can sometimes do. That could take it all the way down to the open gap by 190.

I don’t know if things will get that bad, but technically, the test of the head is a valid possibility.

The optimist might suggest that the last week or so was light volume holiday chaos, and we will get the real direction this coming week.

The Wilshire 4500 (S-fund) also broke below its neckline but is trying to find support at the 20-day EMA (green). The main thing here for the Wilshire is to recapture that resistance line as soon as possible.


Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk

The EFA (EAFE Index / I-fund) has retreated from the resistance of the 50-day EMA as if it were reading the technical analysis textbook. That is typical bear market action. The I-fund ended the year 19% below the C-fund, so choose your funds carefully. It could be the leading fund this year, but we have to watch the charts for clues.

Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk

While stocks were falling, the AGG (Bonds / F-fund) broke out to the upside of a cup and handle formation. This is more textbook technical analysis. I didn’t think bonds could be so strong with the economy supposedly getting stronger, but unless it was a holiday week fluke, this chart says bonds look bullish.

Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk


Good luck and thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk Market Commentary. If you need more help deciding what to do with your account, perhaps one of our premium services can help.

Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.