TSP Charts 5/24/15

Last week the markets didn’t move a lot in either direction. We call that being flat or consolidation. With my setup or mixture, I was up .10%. But we do have at least 2 charts that we need to talk about and that is Small Cap and Bonds. I want to spend a little extra on Bonds, because it looks like as of today, daily, weekly, and monthly will be a sell by the end of next week.

First though, the simple charts and that is the S&P 500 and International.

You can argue that the S&P500 hasn’t done much in 2015 but it is still up. We call this the grind or the wall of worry. Everyone thinks it has to rollover and or crash but prices just keep inching higher. Last week we hit an all time closing high twice.

Last week the International did nothing. Sideways consolidation but stayed track to keep the trend intact. There is not much to say here except we continue to watch and ride.

Last Monday, the Small Cap made a big move to the upside and then held it the rest of the week. That move put us back above the sell CBL and above the 50 day ma. It helped keep the uptrend intact and place a little distant from the sell levels. See those yellow brackets on the chart above? The last time that price went sideways and the 50 day ma plowed through the middle of price, we had a nice pop to the high side. Are we there again? There is no technical pattern here that has been proven, but it is an observation to note and see how it plays out. No warnings and we just watch an ride.

  Even in the bad, I can sometimes find the positive, but bonds it is getting harder by the week. I do not think Bonds will do a complete 5% downside collapse this year, but it is possible. The other thing that is possible is that it will end the year with a negative gain of some kind. The 50 day ma is falling. The uptrend line in green is broken. Currently it is hard to see a uptrend or downtrend on the daily chart. The positive I see is that major support line is holding. The bad about that support is once last week we closed for the first time below it. What will happen next week? Bonds have been a daily sell since May 1. So what about the current weekly chart?

Bonds on the Weekly chart are very, very close to firing a sell. When that green crosses below the red ma, we have a sell. That could happen at the close of next week. The weekly doesn’t fire many signals and if you look to the far left of the chart you will see the last buy signal, green up arrow, fired the week of February 17, 2014.

If today was the end of May, the bonds would be a sell. Prices still have 4 trading days to recover, but I do not see that happening. If all 3 indexes are firing a sell by next Friday, I think owning bonds is dead money for now. So as you can see above by looking at all three time frames, Bonds are in a funk and I would not own them. It is possible that the L-funds will drag a little also because all the L-funds have some bonds inside their portfolio’s. Most of the TSP L-funds have 5 to 6% of the portfolio in bonds, so to much damage can be done, but you have to know it is there.