After a healthy pre-holiday rally last week, stocks did some digesting of those gains on Tuesday giving us some concern about a post holiday reversal. The indices did close well off their lows, but they also pulled back right after moving into positive territory for the day during afternoon trading, so it was quite choppy. The Dow lost 223-points. Small caps (S) lagged, and bonds (F) fell sharply - another reversal from last week. Oil gave back big early gains to close up just slightly, so it was a possible negative reversal.
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The holiday reversal phenomenon may be playing out for this holiday, but if we look at the old Memorial Day chart, it is not unusual to see some selling on the Tuesday after Memorial Day weekend, but the rest of the week gets a little better. This chart only goes to 2011, so...
Chart provided courtesy of www.sentimentrader.com
... here's one I threw together that is for 2012 through last week.
Again, a slightly bullish bias with some possible headwinds on Friday if it sticks to the historical norm.
We're all stuck in our allocations sweating out the week's action and we do not know when our TSP accounts will be back online. As I mentioned, I will use this shutdown to take some time off so I am going to leave up some interest data I noticed and posted in Tuesday's commentary. It seems relevant.
Here's a little something I noticed:
Back in December of 2018 there was a very similar decline in the S&P 500 were it bottomed just shy of a 20% decline of the high. There was a big spike in trading volume in December 2018 (above chart), but that happened to be a quadruple witching expiration Friday and the actual lows that year came on Christmas Eve and the day after Christmas when trading volume was low to normal - not really a high volume capitulation. That spike in volume that you see below happens every December upon expiration Friday.
The data next to the S&P chart is the Fed Funds Interest Rate as it was slowly being increased over the prior 20+ months. At the point where the Fed raised the rate to 2.25% - 2.50% on December 19, they were planning to continue hikes, but changed their tune as the market reacted to that 12/19 hike with a nasty plunge into Christmas. They stopped raising rates and that basically triggering that bottom and reversal at the end of December that year. I'll show what happened afterward below this next chart.
Here is the current chart. Notice the PMO (Price Momentum) indicator on the bottom compared to 2018. It hit -3 and curled back up. The only difference now is that the Fed plans to continue to raise rates in 2022 but they opened the door to a pause later in the summer, and that may be what triggered some buying in the stock market last week.
Here is what happened after that December 2018 reversal and into 2019.
Is that what we're seeing now? Maybe, but we still have high inflation and other issues haunting us, and the Fed will likely raise rates again before considering a pause, so I'm not sure if we are getting an all's clear signal just yet, but it's a possibility and I am certainly open to a bottom forming under these recent conditions.
It's a busy weak for economic data including the Consumer Confidence report and the Chicago PMI today, the ISM Manufacturing and Fed Beige Book on Wednesday, the weekly employment data on Thursday, and then the May jobs report on Friday. For the jobs report estimates are looking for a gain of about 300,000 new jobs.
Nothing new to report out of the TSP, and we don't know when they will be back online, but I will resume full commentaries once we have access again. Again, here is the information that we have been following.
The TSP has stated that "All transactions temporarily unavailable May 26 to the first week of June."
It does not say "All transactions temporarily unavailable May 26 through the first week of June."
So we don't know for sure when they will come back online.
This is now what you get if you try to access your account.
"Be sure to check back here to see when the new My Account is available. When available, all TSP participants will need to set up a new login for the new My Account. This one-time setup process will give you step-by-step prompts to make it simple for you to verify your identity, create a username and password, update your contact information, and set up your account security. Once you log in to My Account, you’ll notice a fresh design, new tools, and enhanced features to help you manage your account."
https://www.tsp.gov/my-account-temporarily-unavailable/
Notice that it says "check back here to see when the new My Account is available", which means they don't have a specific date yet.
Rather than go over all again, here are some links to some key dates and fund changes being made.
https://www.tsp.gov/new-tsp-features/key-transition-dates
https://www.fedsmith.com/2022/05/10/tsp-mutual-fund-window-officially-beginning-in-june/
https://www.tsp.gov/new-tsp-features/summary-of-changes/#Investments
I may 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 I may take advantage of this shutdown by cutting down on the commentaries while the TSP is shutdown.
RevShark is a pro trader outside of the TSO and 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!
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 (More here) 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.
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 with a quick update.
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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[TD="width: 281, align: center"] Daily TSP Funds Return
No TSP share price data since 5/26[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
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Chart provided courtesy of www.sentimentrader.com
... here's one I threw together that is for 2012 through last week.
Again, a slightly bullish bias with some possible headwinds on Friday if it sticks to the historical norm.
We're all stuck in our allocations sweating out the week's action and we do not know when our TSP accounts will be back online. As I mentioned, I will use this shutdown to take some time off so I am going to leave up some interest data I noticed and posted in Tuesday's commentary. It seems relevant.
Here's a little something I noticed:
Back in December of 2018 there was a very similar decline in the S&P 500 were it bottomed just shy of a 20% decline of the high. There was a big spike in trading volume in December 2018 (above chart), but that happened to be a quadruple witching expiration Friday and the actual lows that year came on Christmas Eve and the day after Christmas when trading volume was low to normal - not really a high volume capitulation. That spike in volume that you see below happens every December upon expiration Friday.
The data next to the S&P chart is the Fed Funds Interest Rate as it was slowly being increased over the prior 20+ months. At the point where the Fed raised the rate to 2.25% - 2.50% on December 19, they were planning to continue hikes, but changed their tune as the market reacted to that 12/19 hike with a nasty plunge into Christmas. They stopped raising rates and that basically triggering that bottom and reversal at the end of December that year. I'll show what happened afterward below this next chart.
Here is the current chart. Notice the PMO (Price Momentum) indicator on the bottom compared to 2018. It hit -3 and curled back up. The only difference now is that the Fed plans to continue to raise rates in 2022 but they opened the door to a pause later in the summer, and that may be what triggered some buying in the stock market last week.
Here is what happened after that December 2018 reversal and into 2019.
Is that what we're seeing now? Maybe, but we still have high inflation and other issues haunting us, and the Fed will likely raise rates again before considering a pause, so I'm not sure if we are getting an all's clear signal just yet, but it's a possibility and I am certainly open to a bottom forming under these recent conditions.
It's a busy weak for economic data including the Consumer Confidence report and the Chicago PMI today, the ISM Manufacturing and Fed Beige Book on Wednesday, the weekly employment data on Thursday, and then the May jobs report on Friday. For the jobs report estimates are looking for a gain of about 300,000 new jobs.
Nothing new to report out of the TSP, and we don't know when they will be back online, but I will resume full commentaries once we have access again. Again, here is the information that we have been following.
The TSP has stated that "All transactions temporarily unavailable May 26 to the first week of June."
It does not say "All transactions temporarily unavailable May 26 through the first week of June."
So we don't know for sure when they will come back online.
This is now what you get if you try to access your account.
"Be sure to check back here to see when the new My Account is available. When available, all TSP participants will need to set up a new login for the new My Account. This one-time setup process will give you step-by-step prompts to make it simple for you to verify your identity, create a username and password, update your contact information, and set up your account security. Once you log in to My Account, you’ll notice a fresh design, new tools, and enhanced features to help you manage your account."
https://www.tsp.gov/my-account-temporarily-unavailable/
Notice that it says "check back here to see when the new My Account is available", which means they don't have a specific date yet.
Rather than go over all again, here are some links to some key dates and fund changes being made.
https://www.tsp.gov/new-tsp-features/key-transition-dates
https://www.fedsmith.com/2022/05/10/tsp-mutual-fund-window-officially-beginning-in-june/
https://www.tsp.gov/new-tsp-features/summary-of-changes/#Investments
I may 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 I may take advantage of this shutdown by cutting down on the commentaries while the TSP is shutdown.
RevShark is a pro trader outside of the TSO and 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!
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 (More here) 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.
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 with a quick update.
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.
