There was no budget or debt deal made in Washington last week, but that didn’t stop the market from reacting to the rumors. For those who like volatility, it was a week of big swings. Stocks were down sharply on Monday and Tuesday, stabilized on Wednesday with a positive reversal day, then they soared on Thursday and followed through on Friday. Thursday 323-point gain in the Dow was the largest one-day gain of the year.
After all was said and done, it was a relative flat to modestly higher week for stocks and bonds.
Here are the weekly, monthly, and annual TSP fund returns through Friday, October 11…
The S&P 500 (SPY) broke its recent descending trading channel (black), exploding to the upside, and moving back above the 20-day and 50-day moving averages. All good stuff, but in the process, Thursday’s rally created another big open gap that may have to be filled. If the folks in Washington determine that they don’t have a deal on the budget and debt ceiling negotiations, that fill could happen sooner rather than later – and judging by the latest from Washington, that is a real possibility. If we do get a concrete deal that postpones those deadlines for 6 weeks or whatever they decide, we may be revisiting that open gap some time in November or December.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer-term chart shows that the long-term rising trend (red) is back in business. As long as this rising trading channel is intact, and the S&P 500 remains above the 50-day EMA, we can probably stay with a bullish bias. Of course if we start reaching up near the top of the channels we might look to be profit takers rather than buyers, and wait for better opportunities to buy.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds have been consolidating and took a hit on Thursday when stocks soared, but these charts look bullish for bonds and the F-fund as of right now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 30-year bond is in a bull flag, and they tend to break to the upside. The 10-year Bond rebounded off of the 50-day EMA and remains above the rising support line. It looks good, until these break.
For any of you that are /were in the I-fund, the TSP pulled a quick one on us. Nothing bad, but their initial posting of Thursday’s I-fund price was changed. It was initially reported as 24.0896 (+1.15%) but was later changed to 24.2489 (+1.82%). The change in the I-fund price also affected all of the L-fund prices. I have noticed that other websites such as govexec.com, fedsmith.com, etc., never corrected it so just be aware. You should know better than to look elsewhere for your TSP info anyway. 
The change would only affect you if you made any Interfund Transfers on Thursday. You may have bought or sold the I-fund, or L-funds, at a higher price than you originally thought.
Good luck, thanks for reading, and have a great holiday weekend. The TSP is closed on Monday and won’t process transactions.
We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at http://www.tsptalk.com/comments.html.
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.
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