It was a short but productive week for the bulls. Both the C and S-funds were up three of the four trading days this week with modest losses to finish the week Friday. The S-fund led the TSP funds for the week with a gain of 2.59% to continue a profitable start to July that started the Friday before the holiday weekend. That did not seem to be the case at the Tuesday's open when stocks opened down to start the new week. The U.S. stock funds were down near 2% in the early trading of Tuesday, but a steep reversal turned the day into slight gains for the C-fund and a 1.15% gain for the S-fund. That set the tone for the rest of the week where the bulls outplayed the bears by suppressing any significant pull back that has become common this year.
The June Jobs Report was published Friday morning and led to stocks opening down. The report showed the labor market was outperforming expectations despite the monetary tightening by the Federal Reserve. Why would a report like that send stocks down? Many fear the Federal Reserve's campaign to combat inflation by raising borrowing costs could consequently lead the U.S. into a recession. Well Friday's positive data on the job market provided the FOMC with justification to continue the rate hikes at full force in the upcoming FOMC meeting later this month where they will likely raise rates by 75 basis points for the second consecutive time.
But why did the bulls limit the damage? Because maybe we aren't doomed for a recession! A recession narrative has been a driving force for the bear market that has plagued the market for six months. The June Jobs Report showcased the resilience of the job market and brought some optimism amongst otherwise poor economic data.
This week was a nice break from the typical volatile action. But we're headed into technical headwinds this coming week and we can't get too comfortable. Most retail investors have been beaten up this year and the moving averages and trend lines above current prices will give them a reason to lock in the recent gain. It's a difficult market to join for the long-run as we saw for example in mid-June when a couple weeks of promising upside action turned quickly into deep losses in just two days. Protect what you've got and be patient for opportunities.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP Talk AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending July 8:
SPY (S&P 500 / C-fund) was up the first three days of the week to drive the price back above its 20-day EMA. In late June the ETF had just two days where it closed above the 20-day EMA before pulling back below. Thursday was the closing high for the week, but it was still below the high of the late-June action. In that time the ETF could not enter the price range of the open gap seen below. Will this time be different or will the bottom of the gap act as resistance again. Well, it is not promising to see the 50-day EMA as another technical hurtle within that open gap. The C-fund was up 1.98% for the week.
The Dow Completion Index (S-fund) similarly could not outreach the closing price established on June 24th. A difference in the charts is this index will need to price above its 50-day EMA just to reach the open gap above. But it has been a promising start to the second half of the year for this struggling fund. But its past performance is exactly why we should remain cautious about it. The S-fund led the TSP funds with a gain of 2.59% despite giving up 0.26% on Friday.
EFA's (EAFE Index / I-fund) lagged the TSP stock funds. While the U.S. stock funds had gains of more than 1 and 2 percent, the I-fund ended the week with a loss of 0.10%. The positive news is the I-fund started its week with a 1.89% loss on Tuesday and managed to erase most of that for the rest of the week. This ETF is below its 20-day EMA and has an open gap below it the accompany the two above.
BND (Bonds / F-fund) was up Tuesday to close above its 50-day EMA for the first time in 2022. But that was short lived. Bonds pulled back the rest of the week starting with its largest sell-off Wednesday that brought the ETF back below the 50-day EMA. Two open gaps were closed as the ETF fell the last three days of the week. The ETF eventually ended the week back below its 20-day EMA and the F-fund was down 0.92% to lag the TSP funds.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
wwww.tsptalk.com
Last Look Report
Facebook | Twitter
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.
The June Jobs Report was published Friday morning and led to stocks opening down. The report showed the labor market was outperforming expectations despite the monetary tightening by the Federal Reserve. Why would a report like that send stocks down? Many fear the Federal Reserve's campaign to combat inflation by raising borrowing costs could consequently lead the U.S. into a recession. Well Friday's positive data on the job market provided the FOMC with justification to continue the rate hikes at full force in the upcoming FOMC meeting later this month where they will likely raise rates by 75 basis points for the second consecutive time.
But why did the bulls limit the damage? Because maybe we aren't doomed for a recession! A recession narrative has been a driving force for the bear market that has plagued the market for six months. The June Jobs Report showcased the resilience of the job market and brought some optimism amongst otherwise poor economic data.
This week was a nice break from the typical volatile action. But we're headed into technical headwinds this coming week and we can't get too comfortable. Most retail investors have been beaten up this year and the moving averages and trend lines above current prices will give them a reason to lock in the recent gain. It's a difficult market to join for the long-run as we saw for example in mid-June when a couple weeks of promising upside action turned quickly into deep losses in just two days. Protect what you've got and be patient for opportunities.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP Talk AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending July 8:
SPY (S&P 500 / C-fund) was up the first three days of the week to drive the price back above its 20-day EMA. In late June the ETF had just two days where it closed above the 20-day EMA before pulling back below. Thursday was the closing high for the week, but it was still below the high of the late-June action. In that time the ETF could not enter the price range of the open gap seen below. Will this time be different or will the bottom of the gap act as resistance again. Well, it is not promising to see the 50-day EMA as another technical hurtle within that open gap. The C-fund was up 1.98% for the week.
The Dow Completion Index (S-fund) similarly could not outreach the closing price established on June 24th. A difference in the charts is this index will need to price above its 50-day EMA just to reach the open gap above. But it has been a promising start to the second half of the year for this struggling fund. But its past performance is exactly why we should remain cautious about it. The S-fund led the TSP funds with a gain of 2.59% despite giving up 0.26% on Friday.
EFA's (EAFE Index / I-fund) lagged the TSP stock funds. While the U.S. stock funds had gains of more than 1 and 2 percent, the I-fund ended the week with a loss of 0.10%. The positive news is the I-fund started its week with a 1.89% loss on Tuesday and managed to erase most of that for the rest of the week. This ETF is below its 20-day EMA and has an open gap below it the accompany the two above.
BND (Bonds / F-fund) was up Tuesday to close above its 50-day EMA for the first time in 2022. But that was short lived. Bonds pulled back the rest of the week starting with its largest sell-off Wednesday that brought the ETF back below the 50-day EMA. Two open gaps were closed as the ETF fell the last three days of the week. The ETF eventually ended the week back below its 20-day EMA and the F-fund was down 0.92% to lag the TSP funds.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
wwww.tsptalk.com
Last Look Report
Facebook | Twitter
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.
