Stocks had a good start last week and we saw solid gains in all of the TSP funds as earnings have been coming in a better than expected in some of the major companies. But by Friday, the situation in Russia and the Ukraine was heating up and those headlines heading into the weekend gave investors a reason to do some profit taking.
Here are the weekly, monthly, and annual TSP fund returns through Friday, April 25. The small caps continue to lag, bonds remain strong, and yields are falling as investors opt for safety over risk.
The SPY (S&P 500 / C-fund) does not look bad, but a pullback here, before testing the recent highs, could be a concern. It closed above the 20 and 50-day EMAs, which is a plus, but we'll have to see if this week's new lower peak is anything to be concerned about. There is an open gap down near 184 that could be a target for any further downside action.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) appears to be in a down trend after pulling back from the overhead resistance. It is now below the 20-day and 50-day EMAs, and this is what a top of a market would look like. It is still trading above the longer-term rising support line and the 200-day EMA, so it may be premature to declare the bull market over. But the action is concerning and you may want to get your defense warming up in the bullpen.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds continue to stay afloat, which is a possible negative reflection of the economy. Bond yields generally fall (bond prices rise) when the economy is slowing, so this is actually a red flag for the stock market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With yields falling and gold perking up over the last few days, it could just be a reaction to the situation in the Ukraine. We may know more after the weekend, and if nothing escalates, we could see stocks bounce back and bonds pullback. But if things get worse, you may need to go to your bullpen.
Good luck,thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk Market Commentary.If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Tom Crowley
www.tsptalk.com
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