Stocks rallied last week with some indices testing, and even breaking above, their December highs.
Here are the weekly, monthly, and annual TSP fund returns through Friday, February 14…
The S&P 500 (SPY / C-fund)) filled its open gap from January (red), and the old highs are within a stone’s throw. Stocks may be a little tired here after a big 7 day rally and this type of setup in 2013 produced multiple outcomes. All made new highs, but a couple produced another wave of selling. One gave us a continued rally. The indices are very overbought and the chances of a short-term pause or pullback in the next week are getting high.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The comparison of the 1929 chart of the Dow still shows a strikingly similar pattern, but as we talked about in our daily commentary last week, so many people are aware of this setup now, that the chances of it playing out the same way, and ending with a sharp decline, have likely diminished. I told the story of how my son’s old baseball coach, who knows nothing about the stock market, posted the chart on Facebook. We have been watching it for a couple of months now and it has helped show the way, but that Facebook post, along with a few mentions on TV and internet news, is probably a sign that the comparison is about over.
Source www.mcoscillator.com, analysis by TSP Talk
Bonds have been pulling back as stocks have risen, but the 200-day EMA is trying to hold as support.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If stocks do pause or pullback, bonds should stabilize. They must remain above that 200-day EMA of the F-fund would be in some trouble.
Good luck, thanks for reading, and have a great weekend! 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. If you need some help figuring out what to do, perhaps one of our premium services can help.
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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