1040 Is Not Just a Tax Form
Chock up another one for technical analysis. Last week’s Wrap-Up was entitled, “One down, one to go”, and we were talking about the key moving averages. That “one to go” didn’t make it last week.
For the week, the TSP stock funds gave back much of the gains from the prior two weeks. The C-fund lost 3.63%, the S-fund was down 3.41%, and the I-fund gave back 1.71%. Bonds (F-fund) had a good week at +0.46%, and the G-fund added 0.06%.
For the month, the C-fund is down 1.04%, the S-fund has lost 1.94%, while the I-fund is still up 2.80%. The losses in the C-fund this past week moved it back into negative territory for 2010. The F-fund is up 1.10% in June, and the G-fund is up 0.20%.
Last week we were celebrating the S&P 500’s ability to get back above the 200-day EMA, but it was struggling to get above the 50-day EMA, which can be a formidable opponent on its first test. This was last week’s chart…
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On Monday of last week, the S&P 500 opened much higher on news that China would no longer peg their yuan to the U.S. dollar, and the S&P 500 broke through that 50-day EMA like a hot knife through butter. Unfortunately, almost as quickly as it went up, the market lost momentum and finish that day back down below the 50-day EMA, plus the close below the prior Friday’s low was another technical breakdown. From there, everything went south as not only did the test of the 50-day EMA fail, but the S&P found itself back below the 200-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market is quite overbought right now, which could trigger a short-term bounce, but the technical damage is bad and I prefer to play defense until I see some kind of improvements.
That strong support line running along the 1040 area is very critical for the market. There is very little support below it and while it may not happen in the next week or two, a breakdown of that level has a technical downside target below 900 so keep a close eye on that 1040 area.
If the S&P 500 can turn things around, move back above the 200-day EMA, and continue what looked like the start of a possible new uptrend, then forget all that negative talk. But if it can’t, be prepared.
At TSP Talk we have the slogan, Friends Don’t Let Friends Buy and Hold. From one friend to another, if you see the S&P 500 closing below 1040, I hope you are able to be flexible as there will be a good chance that your TSP account could suffer stiff losses if you are in the stock funds. Until then, may you make money on the bounces, and avoid the dips.
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
--------------------------------------
TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.
The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com. Full Disclaimer
Chock up another one for technical analysis. Last week’s Wrap-Up was entitled, “One down, one to go”, and we were talking about the key moving averages. That “one to go” didn’t make it last week.
For the week, the TSP stock funds gave back much of the gains from the prior two weeks. The C-fund lost 3.63%, the S-fund was down 3.41%, and the I-fund gave back 1.71%. Bonds (F-fund) had a good week at +0.46%, and the G-fund added 0.06%.
For the month, the C-fund is down 1.04%, the S-fund has lost 1.94%, while the I-fund is still up 2.80%. The losses in the C-fund this past week moved it back into negative territory for 2010. The F-fund is up 1.10% in June, and the G-fund is up 0.20%.
Last week we were celebrating the S&P 500’s ability to get back above the 200-day EMA, but it was struggling to get above the 50-day EMA, which can be a formidable opponent on its first test. This was last week’s chart…
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On Monday of last week, the S&P 500 opened much higher on news that China would no longer peg their yuan to the U.S. dollar, and the S&P 500 broke through that 50-day EMA like a hot knife through butter. Unfortunately, almost as quickly as it went up, the market lost momentum and finish that day back down below the 50-day EMA, plus the close below the prior Friday’s low was another technical breakdown. From there, everything went south as not only did the test of the 50-day EMA fail, but the S&P found itself back below the 200-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market is quite overbought right now, which could trigger a short-term bounce, but the technical damage is bad and I prefer to play defense until I see some kind of improvements.
That strong support line running along the 1040 area is very critical for the market. There is very little support below it and while it may not happen in the next week or two, a breakdown of that level has a technical downside target below 900 so keep a close eye on that 1040 area.
If the S&P 500 can turn things around, move back above the 200-day EMA, and continue what looked like the start of a possible new uptrend, then forget all that negative talk. But if it can’t, be prepared.
At TSP Talk we have the slogan, Friends Don’t Let Friends Buy and Hold. From one friend to another, if you see the S&P 500 closing below 1040, I hope you are able to be flexible as there will be a good chance that your TSP account could suffer stiff losses if you are in the stock funds. Until then, may you make money on the bounces, and avoid the dips.
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
--------------------------------------
TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.
The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com. Full Disclaimer
