The bulls finally step up
After weeks of corrective action, the stock market finally saw a positive rally that had some teeth. If you recall, the market started to rally the prior week before the Fed’s comments brought the sellers back in, but last week the buyers stayed in control.
For the TSP, the C-fund was up 5.66% for the week. The S-fund gained of 5.41%, while the I-fund led the way at +5.96%. Bonds (F-fund) lost 1.01%, and the G-fund was up 0.05%.
So July gets off to a great start and June, which got off to a terrible start, finished strongly. The monthly returns shown above represent Friday’s gains, which was the first trading day in July. The final numbers for June were: The C-fund was down 1.67%, the S-fund lost 2.35%, and the I-fund gave up 1.16%, while bonds (F-fund) lost 0.30%, and the G-fund picked up 0.21% in June.
The S&P 500 (our C-fund) was up all five days last week after finding support at the 200-day EMA. Then, not only did the S&P move up to test the 50-day EMA, it easily broke right through it. I had been leaning toward being bullish and I figured that we would eventually see a rally up to the 50 EMA, but to be honest I did not think it would be able to move above it – at least not on the first try.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Although we are not out of the woods yet, the technical picture has improved greatly, and now that the 50-day EMA has been broken and we have had 3 closes above it, we can anticipate it acting as support on any pullback. The descending resistance line may also act as support, now that it has been broken.
In last week’s Weekly Wrap-Up we said that with the S&P 500 sitting on the 200-day EMA and finding support at the longer-tern support line, aggressive investors have a decent risk / reward play in that if the market broke below those levels we’d know it is time to get out for a while.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Those who wanted to play it more cautiously would wait to see how the support held up before taking a risk. At this point I’d say it is safe for them to buy pullbacks again, unless and until the 50-day EMA is broken on the downside again.
Happy Independence Day!
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.
After weeks of corrective action, the stock market finally saw a positive rally that had some teeth. If you recall, the market started to rally the prior week before the Fed’s comments brought the sellers back in, but last week the buyers stayed in control.
For the TSP, the C-fund was up 5.66% for the week. The S-fund gained of 5.41%, while the I-fund led the way at +5.96%. Bonds (F-fund) lost 1.01%, and the G-fund was up 0.05%.
So July gets off to a great start and June, which got off to a terrible start, finished strongly. The monthly returns shown above represent Friday’s gains, which was the first trading day in July. The final numbers for June were: The C-fund was down 1.67%, the S-fund lost 2.35%, and the I-fund gave up 1.16%, while bonds (F-fund) lost 0.30%, and the G-fund picked up 0.21% in June.
The S&P 500 (our C-fund) was up all five days last week after finding support at the 200-day EMA. Then, not only did the S&P move up to test the 50-day EMA, it easily broke right through it. I had been leaning toward being bullish and I figured that we would eventually see a rally up to the 50 EMA, but to be honest I did not think it would be able to move above it – at least not on the first try.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Although we are not out of the woods yet, the technical picture has improved greatly, and now that the 50-day EMA has been broken and we have had 3 closes above it, we can anticipate it acting as support on any pullback. The descending resistance line may also act as support, now that it has been broken.
In last week’s Weekly Wrap-Up we said that with the S&P 500 sitting on the 200-day EMA and finding support at the longer-tern support line, aggressive investors have a decent risk / reward play in that if the market broke below those levels we’d know it is time to get out for a while.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Those who wanted to play it more cautiously would wait to see how the support held up before taking a risk. At this point I’d say it is safe for them to buy pullbacks again, unless and until the 50-day EMA is broken on the downside again.
Happy Independence Day!
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.
