TSP Weekly Wrap-Up – Earnings Nerves

It’s your weekly dose of TSP Talk from www.tsptalk.com.

Earnings Nerves

The fourth quarter earnings reports started to drip out last week, and while we had a clunker or two, for the most part they were pretty good; yet the market seemed jittery as we saw a “sell the news” reaction on Friday.

Volume was not particularly high so the selling wasn’t overly fierce. After the run that stocks have had in the lest several weeks, we sure wouldn’t be surprised to see some kind of a pullback, but don’t count the bulls out yet. I’ll be very interested to see if buyers step up again on Monday morning.

For the week, all of the stock funds were down. The S-fund lost 1.26%, the C-fund was down 0.77%, and the I-fund slipped 0.23%. The bond fund (F-fund) picked up 0.70% while the G-fund added 0.07%.

For the month however, all of the funds remain positive with the stock funds up 2% to 3% and the F-fund up an impressive (and surprising) 1.22%.

Technically, the chart of the S&P 500 looks fine, although still extended. This coming week’s action will be quite telling as the rising trend will either break, or be supported.

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

Despite some warning signs, it is a little too early to put an all out defensive unit on the field. The pullbacks to that rising support line have given us decent buying opportunities. If you have ridden this thing up this far, you have some gains to play with and may want to stay aggressive. Otherwise, keep a close eye on this trend. If it breaks, we may be in for at least a short-term pullback / correction, and the defense may need to come out. Monday should be interesting.

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up. Our market commentary is updated daily on www.tsptalk.com

Tom Crowley
TSP Talk