On Wednesday the Fed announced that they will begin to taper their $85 billion a month bond buying program by $10 billion and investors seem to applaud the action as stocks soared with the Dow gaining nearly 300-points on the day. Now we head into the strongest seasonal strength of the year for stocks so can the buying continue?
Here are the weekly, monthly, and annual TSP fund returns through Friday, December 20…
The S&P 500 (SPY / C-fund) had fallen to the 50-day EMA on Wednesday immediately after the Fed announcement, but that quick knee-jerk reaction was short-lived and it is back in the rising trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is what the market is facing as far as seasonality goes this coming week. Monday is day # -2 on this chart. Tuesday will be a short trading day with stocks closing at 1 PM ET, but that won’t affect the TSP transactions. The TSP is obviously closed on Wednesday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Just a reminder that stocks were down the week of Christmas last year so there are no guarantees. Clearly history is on the side of the bulls, but we are near the highs and there is a potential for some profit taking, although I am a little more concerned with possible January selling for tax purposes.
Not surprisingly, investor sentiment is extremely bullish so there is some vulnerability out there.
Good luck, and thanks for reading. Have a Merry Christmas and enjoy your holiday shortened week! 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
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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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