Weekly update TSP, 2/24/12

Another week of gains and the International Fund, I-fund was the winner. The Small Cap, S-fund, actually slipped a little bit to the downside. I have been looking at different charts in various time frames and I really cannot find any weakness in the charts. I do not want to get complacent and watch all my gains disappear, so let’s dig in.

The first chart is a monthly chart on the S&P 500 just so I could show the long term trend, which is up, and it shows what resistance levels we are going to face. At the close this past Friday you can see for the month of February we closed at the upper end of the mark and we are butting up against resistance at $1370. I expect that we will battle at this level for a week or two to see if once again buyers are ready to support this level and or push through it. Remember this number, $1341. If we close below that number in the near future, then the following day I would have to take a serious look on pulling out to see what is going to happen in the market. I’m calling that number my personal safety point. I still believe we are in the early stages of an uptrend, if you look at a weekly chart. We are in week 8 after from the last positive crossover and once it crosses to the upside it could be a long time before it reverses. The last upside run was 46 weeks. Not all of it was pretty because of a major drop the last week of that run, but it still worked out to about a 7% gain. So, other than future resistance levels, there is not much to say about this week’s numbers in the S&P500. We are still in and watching for signs of a pullback.

The weekly Small Cap is only 3.6% from an all time high. So I expect that next 26 point climb to reach that level could be rocky. No matter what we think, this is more than just a numbers game in the real world. There is all kinds of number crunching that goes on behind the scenes to push prices up and down and breaking all times highs can turn emotional as well. Like the S&P500, I see no weakness here yet.

The International Fund has finally and officially joined the rest of our indexes in that the moving averages crossed over to the plus side and the chart is now in an uptrend. I called the entry here February 7th and this week it made the best upward move of 1.16%. This index and the companies that make up this index have been pounded since the beginning of 2007, so I think they are poised to run. The monthly chart is still catching up and still has yet to crossover to the plus side. There is a lot of potential to run here considering it is extremely oversold. I will be watching this index closely the next few weeks and if the uptrend continues, I will more than likely adjust my portfolio to be a little more aggressive in this index. I see no need to rush in considering the amount of negative news that has come out of Europe in the last 12 months or so.

The only thing I need to mention is that bonds once again threw me a little curve ball. Price went up .24%, which is not much, but considering the S&P only went up .33%, it makes me raise an eyebrow. T-bills, 10year, and 20 year all went up this week. They didn’t make any new highs and they are still in the consolidating mode with no direction, but I was really expecting them to officially turn down this past week. I guess we will continue to watch bonds to see if it gives us an early sign to bail or a final notice that this stock uptrend is real. Technically speaking, I suppose they could go sideways for a long time like 2003-2007 while stocks rolled up hill. If that pattern holds true here, then we are good to go.

Do not be greedy. You should have a 8-13% gain since January if you invested in the C,S, and I individually. If your starting to feel like things can’t go much higher without a fall, bailout. That is a hell of a gain for an entire year.

TSP Distribution: C-fund 25%, I-fund 25%, S-fund 50%