The market fought through some obstacles to close with solid gains on Wednesday as the Fed meeting minutes revealed a more hawkish, but more definitive Fed. The Dow gained 192-points on the day, and that's actually 4 days of gains in a row. The more volatile Nasdaq had an even bigger gain but after the bell some disappointing tech earnings stepped on those gains. Small caps led with a gain over 2% on the day. Bonds were up again, and the High Yield Corporate Bonds rallied big yesterday, which is usually a good sign for stocks.
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After the bell we saw some selling in Nvidia and Snowflake after they reported earnings, and that some pressure on the futures, but Twitter bounced on acquisition news so overall there was a mildly negative reaction after hours yesterday according to the futures market. It seems like every time we get a rally in stocks during the day, something happens after hours to stall the upside momentum. Welcome to a bear market.
The Fed minutes laid out their rate hike schedule and that adds some certainty which the market craves. Right now the market seems to be in a zone where it knows rates are going higher, and it may not care as much about how high they have to go, but rather more concerned when these hikes can get us past inflation and start looking forward from that point.
At this point we all know we are in a bearish market and whether you are sitting on the sidelines and waiting it out, or doing some buying here and there to try to catch a bounce, the thing we are all facing now with our TSP accounts is the shutdown of transactions (IFTs) starting right after today's (5/26) 12 noon ET IFT deadline. So, position yourself where you will feel comfortable for a few days to a week.
Once again, the TSP will stop processing IFTs after noon ET on May 26 through the "first week in June", so this morning will be your last chance to make a move until they get back online. What day exactly is the first week of June is, I don't know yet. More: https://www.tsp.gov/new-tsp-features/key-transition-dates
Monday is a holiday so we won't be posting a commentary that day, but I may also take a day or two off from the daily commentary with a couple of brief write ups while the TSP is down. My TSP Talk Plus ETF System will continue to trade so there could be text alerts sent for those, but it has been a very long time since I have had a real vacation where I did not have to work at all during the week (2003, I believe) and so I may take advantage of this shutdown by cutting down on the commentaries while the TSP is shutdown.
RevShark is a pro trader so he's not taking time off so we will likely post his daily general market commentary for his subscribers each morning, and the Intrepid Timer service also has ETF trades so I assume he will keep subscribers up to date although the daily write ups may be limited during the TSP shutdown.
I will shut down the AutoTracker for IFT entries after noon on Thursday the 26th to keep in sync with the TSP. I don't know when the TSP will be coming back online so I don't know how long I will restrict trades, but I will keep an eye out for information. If you hear anything, please let me know. tom @ ... etc. Thanks!
Here's some basic information from FedSmith.com about the new mutual funds that will be available, some of the requirements and restrictions in order to invest. https://www.fedsmith.com/2022/05/10/tsp-mutual-fund-window-officially-beginning-in-june/
And from tsp.gov:
Mutual fund window
The mutual fund window is designed for TSP participants who are interested in greater investment flexibility. If your account meets certain eligibility criteria, you can choose to access a selection of more than 5,000 mutual funds. As with most mutual funds, this flexibility comes with fees:
$55 annual fee to ensure that use of the mutual fund window does not indirectly increase TSP administrative expenses for TSP participants who choose not to use the mutual fund window.
$95 annual maintenance fee
$28.75 per trade fee
Other fees and expenses specific to chosen mutual funds
If you choose to invest through the mutual fund window, your initial investment must be at least $10,000, and you may not invest more than 25% of your total account in the mutual fund window.
https://www.tsp.gov/new-tsp-features/summary-of-changes/#Investments
At this point we (TSP Talk) have decided not to incorporate the new mutual funds being offered by the the TSP into our AutoTracker.
The reasons being that there will be some 5000 options, and it would be too daunting of a task to program that in. Plus the fees involved (see below) would also impact the return of allocated in these funds, and so we would not be able to accurately reflect this in our returns.
So, for now, we keep the Autotracker as is. If we decide that some of the Premium Services will use a couple of these new funds, we may incorporate those funds at some point into the Autotracker just to keep the services accountable by accurately tracking their return, but we still do not know what those funds are so we can not speculate at this time.
We will keep you up to date as we get more information.
The S&P 500 (C-fund) seems to be doing a pretty good job of repeating the pattern from February / March, just before a decent relief rally. We haven't had any kind of high volume capitulation-like sell off yet, but this bearish activity has been going on for a while now and the reaction to the losses may be like the frog sitting in a pot of water that is gradually coming to a boil, rather than tossing that frog into a pot that is already boiling. Different reactions. Do not try that at home. Sorry animal lovers.
The DWCPF (S-fund) continues to have wild swings as it had another 2% plus move yesterday, this one up, but the pattern looks to show it is at some kind of a pivot point as it tries to move above that descending resistance. That makes today quite important as we should either see a pullback below that resistance, or a breakout above it that could change things.
The EFA (I-fund) lagged some on Wednesday as the dollar bounced back after the recent pullback. It is showing signs of making a bottom but there is still plenty of resistance to get through before that can be confirmed.
BND (bonds / F-fund) did it again and something is clearly different here. The 50-day EMA is just overhead and that can be a bear market road block, just as we saw in early March.
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. Monday is a holiday and we cannot make an IFT on Friday so updates may be spotty for a few days.
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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[TR]
[TD="align: center"]
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[TD="width: 338, align: center"] Daily TSP Funds Return
[TR]
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[/TR]
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[/TR]
[/TABLE]
After the bell we saw some selling in Nvidia and Snowflake after they reported earnings, and that some pressure on the futures, but Twitter bounced on acquisition news so overall there was a mildly negative reaction after hours yesterday according to the futures market. It seems like every time we get a rally in stocks during the day, something happens after hours to stall the upside momentum. Welcome to a bear market.
The Fed minutes laid out their rate hike schedule and that adds some certainty which the market craves. Right now the market seems to be in a zone where it knows rates are going higher, and it may not care as much about how high they have to go, but rather more concerned when these hikes can get us past inflation and start looking forward from that point.
At this point we all know we are in a bearish market and whether you are sitting on the sidelines and waiting it out, or doing some buying here and there to try to catch a bounce, the thing we are all facing now with our TSP accounts is the shutdown of transactions (IFTs) starting right after today's (5/26) 12 noon ET IFT deadline. So, position yourself where you will feel comfortable for a few days to a week.
Once again, the TSP will stop processing IFTs after noon ET on May 26 through the "first week in June", so this morning will be your last chance to make a move until they get back online. What day exactly is the first week of June is, I don't know yet. More: https://www.tsp.gov/new-tsp-features/key-transition-dates
Monday is a holiday so we won't be posting a commentary that day, but I may also take a day or two off from the daily commentary with a couple of brief write ups while the TSP is down. My TSP Talk Plus ETF System will continue to trade so there could be text alerts sent for those, but it has been a very long time since I have had a real vacation where I did not have to work at all during the week (2003, I believe) and so I may take advantage of this shutdown by cutting down on the commentaries while the TSP is shutdown.
RevShark is a pro trader so he's not taking time off so we will likely post his daily general market commentary for his subscribers each morning, and the Intrepid Timer service also has ETF trades so I assume he will keep subscribers up to date although the daily write ups may be limited during the TSP shutdown.
I will shut down the AutoTracker for IFT entries after noon on Thursday the 26th to keep in sync with the TSP. I don't know when the TSP will be coming back online so I don't know how long I will restrict trades, but I will keep an eye out for information. If you hear anything, please let me know. tom @ ... etc. Thanks!
Here's some basic information from FedSmith.com about the new mutual funds that will be available, some of the requirements and restrictions in order to invest. https://www.fedsmith.com/2022/05/10/tsp-mutual-fund-window-officially-beginning-in-june/
And from tsp.gov:
Mutual fund window
The mutual fund window is designed for TSP participants who are interested in greater investment flexibility. If your account meets certain eligibility criteria, you can choose to access a selection of more than 5,000 mutual funds. As with most mutual funds, this flexibility comes with fees:
$55 annual fee to ensure that use of the mutual fund window does not indirectly increase TSP administrative expenses for TSP participants who choose not to use the mutual fund window.
$95 annual maintenance fee
$28.75 per trade fee
Other fees and expenses specific to chosen mutual funds
If you choose to invest through the mutual fund window, your initial investment must be at least $10,000, and you may not invest more than 25% of your total account in the mutual fund window.
https://www.tsp.gov/new-tsp-features/summary-of-changes/#Investments
At this point we (TSP Talk) have decided not to incorporate the new mutual funds being offered by the the TSP into our AutoTracker.
The reasons being that there will be some 5000 options, and it would be too daunting of a task to program that in. Plus the fees involved (see below) would also impact the return of allocated in these funds, and so we would not be able to accurately reflect this in our returns.
So, for now, we keep the Autotracker as is. If we decide that some of the Premium Services will use a couple of these new funds, we may incorporate those funds at some point into the Autotracker just to keep the services accountable by accurately tracking their return, but we still do not know what those funds are so we can not speculate at this time.
We will keep you up to date as we get more information.
The S&P 500 (C-fund) seems to be doing a pretty good job of repeating the pattern from February / March, just before a decent relief rally. We haven't had any kind of high volume capitulation-like sell off yet, but this bearish activity has been going on for a while now and the reaction to the losses may be like the frog sitting in a pot of water that is gradually coming to a boil, rather than tossing that frog into a pot that is already boiling. Different reactions. Do not try that at home. Sorry animal lovers.
The DWCPF (S-fund) continues to have wild swings as it had another 2% plus move yesterday, this one up, but the pattern looks to show it is at some kind of a pivot point as it tries to move above that descending resistance. That makes today quite important as we should either see a pullback below that resistance, or a breakout above it that could change things.
The EFA (I-fund) lagged some on Wednesday as the dollar bounced back after the recent pullback. It is showing signs of making a bottom but there is still plenty of resistance to get through before that can be confirmed.
BND (bonds / F-fund) did it again and something is clearly different here. The 50-day EMA is just overhead and that can be a bear market road block, just as we saw in early March.
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. Monday is a holiday and we cannot make an IFT on Friday so updates may be spotty for a few days.
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.
