For the second week in a row the Dow and S&P 500 ended Friday with a gain, and that hasn't happened very often in 2022. The gains were minimal and it took a major afternoon positive reversal to get there. Only the S-fund closed in the red as far as the TSP funds go, with the I-fund leading on the upside. Bonds were up nicely as well as they show some signs of trying to break their downtrend. The F and I funds were also the two funds that closed with a gain for the week, with the C-fund lagging after losing an even 3% last week.
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You can see the positive reversal formation in Friday's candlestick. It's not the best kind of a reversal as the S&P closed slightly positive, but below Friday's opening price. The futures were pointing to a big gain at the open but that quickly faded, so the late rally only brought it back to break even. A better reversal formation would be to have seen the S&P close closer to where it opened, and better yet, above the opening price and near the highs of the day. But this close was something for the bulls to build on should they take the lead to start this pre-holiday week.
The S&P 500 had been leading small caps and the Nasdaq all year and last week's underperformance makes you wonder if they are due to start falling behind to catch up to their weakness. This weekly chart shows how far above the 200-week moving average the S&P still is, and where it may be heading, because...
... if we compare that to the charts of the Nasdaq and small caps, we can see that both of them are much closer to, or even below, their 200-week averages. Other than the small caps during the Covid crash, we mostly saw that average hold over the last 6 +years.
So, is it time for the smalls caps of the S-fund to find support and lead on the upside, or will we see another Covid-like breakdown?
Reminder: The TSP will stop processing IFTs after noon ET on May 26 through the "first week in June."What exact day the first week of June is, I don't know yet. More: https://www.tsp.gov/new-tsp-features/key-transition-dates
As we near that date, we see that there is a bullish seasonal bias from the 26th through the first week in June, and and that includes the pre/post Memorial Day weekend action. That might suggest that we should be aggressive heading into that TSP shutdown. Of course we are in a are bear market this year and, as paranoid as this sounds, Wall Street will know that TSP account are stuck in their allocations during this time so they will do what they do to take advantage of that, whatever that is.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The S&P 500 (C-fund) did have a nice looking reversal on Friday but once again it lacked any serious volume, making a reversal more suspect. We did have one of those > 90% up volume days within the last week and that is still a viable sign of a possible low. You'd like to see another one within a week to confirm. Not that the bear market is necessarily over but that it has now been two months since the last serious bear market rally.
The DWCPF (S-fund) ended the day on the downside but it erased most of the 2.7% loss it had just a couple of hours before the close. It closed well below the opening price so as I mentioned above about reversals, it wasn't the best set up, but still better than the alternative.
The EFA (I-fund) was up for a second straight day on Friday but may be near the top of another bear flag. A close above 68.50 would do this chart a lot of good. At least the dollar has been calming down and that could help here.
BND (bonds / F-fund) has been consolidating sideways in May and we are starting to see some of the descending resistance break. It has been overdue for some relief. A move above 76.50 would break more resistance and perhaps give it a nice relief boost to the 50-day average (purple?)
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. 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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You can see the positive reversal formation in Friday's candlestick. It's not the best kind of a reversal as the S&P closed slightly positive, but below Friday's opening price. The futures were pointing to a big gain at the open but that quickly faded, so the late rally only brought it back to break even. A better reversal formation would be to have seen the S&P close closer to where it opened, and better yet, above the opening price and near the highs of the day. But this close was something for the bulls to build on should they take the lead to start this pre-holiday week.
The S&P 500 had been leading small caps and the Nasdaq all year and last week's underperformance makes you wonder if they are due to start falling behind to catch up to their weakness. This weekly chart shows how far above the 200-week moving average the S&P still is, and where it may be heading, because...
... if we compare that to the charts of the Nasdaq and small caps, we can see that both of them are much closer to, or even below, their 200-week averages. Other than the small caps during the Covid crash, we mostly saw that average hold over the last 6 +years.
So, is it time for the smalls caps of the S-fund to find support and lead on the upside, or will we see another Covid-like breakdown?
Reminder: The TSP will stop processing IFTs after noon ET on May 26 through the "first week in June."What exact day the first week of June is, I don't know yet. More: https://www.tsp.gov/new-tsp-features/key-transition-dates
As we near that date, we see that there is a bullish seasonal bias from the 26th through the first week in June, and and that includes the pre/post Memorial Day weekend action. That might suggest that we should be aggressive heading into that TSP shutdown. Of course we are in a are bear market this year and, as paranoid as this sounds, Wall Street will know that TSP account are stuck in their allocations during this time so they will do what they do to take advantage of that, whatever that is.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The S&P 500 (C-fund) did have a nice looking reversal on Friday but once again it lacked any serious volume, making a reversal more suspect. We did have one of those > 90% up volume days within the last week and that is still a viable sign of a possible low. You'd like to see another one within a week to confirm. Not that the bear market is necessarily over but that it has now been two months since the last serious bear market rally.
The DWCPF (S-fund) ended the day on the downside but it erased most of the 2.7% loss it had just a couple of hours before the close. It closed well below the opening price so as I mentioned above about reversals, it wasn't the best set up, but still better than the alternative.
The EFA (I-fund) was up for a second straight day on Friday but may be near the top of another bear flag. A close above 68.50 would do this chart a lot of good. At least the dollar has been calming down and that could help here.
BND (bonds / F-fund) has been consolidating sideways in May and we are starting to see some of the descending resistance break. It has been overdue for some relief. A move above 76.50 would break more resistance and perhaps give it a nice relief boost to the 50-day average (purple?)
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. 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.
