Back to buying the dips
Stocks rallied again last week as investors seem to be shaking off the concerns of Japan and the Middle East. We’ve had a great 2-plus week run. Can it continue?
For the TSP, the C-fund was up 1.45% last week, the S-fund gained 2.68%, and the I-fund picked up 2.20%. Bonds (F-fund) added 0.04%, and the G-fund was up 0.06%.
Surprisingly, the final numbers for the month of March saw all TSP funds but the I-fund closing in positive territory. The C-fund gained 0.40% in March, the S-fund was up 2.06%, the I-fund lost 2.23% as the Japan disaster was just too much to overcome, while the F-fund (bonds) added 0.06%, and the G-fund made 0.26%.
The S&P 500 has rebounded dramatically off of the lows made in March, and the technical picture has improved greatly but there is some overhead resistance.
Chart provided courtesy of www.decisionpoint.com
The indicators are showing signs of being overbought but in a strong bull market stocks can continue higher in spite of this. If there is a concern, we are seeing signs of investors getting overly bullish. Sentiment is a contrarian indicator so when we see extreme bullishness, it could indicate that the overhead resistance could cause a temporary setback. But if the market leader has anything to say about that, the resistance won’t be much of an obstacle.
The market leader Dow Transportation Index has rallied for 7 straight days, despite oil hitting $108 a barrel. The Transports are very sensitive to the price of oil so this is quite a show of strength for this index.
Chart provided courtesy of www.decisionpoint.com
While it seems reasonable to expect the market to pull back after the powerful 2+ week rally, I would not stay away from the stock funds for too long as the train may be pulling out of the station without you. A two to three day pullback would be convenient for us, and healthy for the market.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
Stocks rallied again last week as investors seem to be shaking off the concerns of Japan and the Middle East. We’ve had a great 2-plus week run. Can it continue?
For the TSP, the C-fund was up 1.45% last week, the S-fund gained 2.68%, and the I-fund picked up 2.20%. Bonds (F-fund) added 0.04%, and the G-fund was up 0.06%.
Surprisingly, the final numbers for the month of March saw all TSP funds but the I-fund closing in positive territory. The C-fund gained 0.40% in March, the S-fund was up 2.06%, the I-fund lost 2.23% as the Japan disaster was just too much to overcome, while the F-fund (bonds) added 0.06%, and the G-fund made 0.26%.
The S&P 500 has rebounded dramatically off of the lows made in March, and the technical picture has improved greatly but there is some overhead resistance.
Chart provided courtesy of www.decisionpoint.com
The indicators are showing signs of being overbought but in a strong bull market stocks can continue higher in spite of this. If there is a concern, we are seeing signs of investors getting overly bullish. Sentiment is a contrarian indicator so when we see extreme bullishness, it could indicate that the overhead resistance could cause a temporary setback. But if the market leader has anything to say about that, the resistance won’t be much of an obstacle.
The market leader Dow Transportation Index has rallied for 7 straight days, despite oil hitting $108 a barrel. The Transports are very sensitive to the price of oil so this is quite a show of strength for this index.
Chart provided courtesy of www.decisionpoint.com
While it seems reasonable to expect the market to pull back after the powerful 2+ week rally, I would not stay away from the stock funds for too long as the train may be pulling out of the station without you. A two to three day pullback would be convenient for us, and healthy for the market.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
