Volatility kicked in some this week as we saw back to back 1% moves in the S&P 500 after not having one for over 60 days. Apparently the geopolitical events that scared the market on Thursday was an overreaction and the buyers came back with a vengeance on Friday. The S&P 500 is back near all-time highs but some indices are showing signs of wear, and we’ll have to see which ones lead the way.
Here are the weekly, monthly, and annual TSP fund returns through Friday, July 18…
The swings in the SPY (S&P 500 / C-fund) last week can be a concern because volatility usually picks up before a pullback or correction – something we haven’t seen in a long time. It has been so calm lately and a 1% move, something we usually see on a regular basis, seems foreign and concerning now. We’ll just have to wait and see if it is a warning sign or just back to business as usual. The chart looks pretty bullish.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The small caps are the ones struggling now and the Wilshire 4500 (S-fund) has fallen sharply from the early July high. Friday’s rally helped pull it back above the 50-day EMA after closing below it for one day, but the new descending resistance line is next to be tested.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (I-fund) found support but it looks like a possible bear flag is forming. We have been talking daily about the poor chart development in a few of the European markets and the Japanese Nikkei Index EFA is also looking “toppy” and that tells me this EFA chart may be setting up for a breakdown.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) chart has been in a trading range for the last few months. Last week it tested the top of the range and if stocks roll back over this next week, we could see an upside breakout in bonds. But if stocks resume their positive ways, the AGG will likely pullback into the trading range.
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 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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