This week reminded me of the "carrot and stick" metaphor. Since the end of July I’ve mentioned that the S&P 500’s major resistance line was at 3386, its record high close on 19 February of this year. We’ve closed that gap over the last two weeks, traded above it on an intraday basis, but failed to close above. In last week’s update, I mentioned that “we’re right about 1 percent away” from making a new record high. We cut that gap in half this week with the S&P 500 closing at 3372. On the economic front, we did have some good economic news reported this week. On Thursday new jobless claims dropped below 1 million for the first time since COVID started and on Friday, retail sales increased for three straight months resulting in total sales of $536 billion, a new record high. I’m hopeful these numbers and good news coming out of Wednesday’s FOMC meeting will build a stronger case for a breakout above that 3386 resistance line and allow us to get the carrot. For TSP TIPS, we know the C fund mirrors the S&P 500 index, but not exactly. Unlike the S&P 500, the C fund did cross it’s own resistance line and closed at a new record of $49.99 on Wednesday. To complement this, the S fund has outpaced the C fund by about 17 percent from the 23 March lows, and both have “A” performance rankings. Since this bullishness seems to be broadening, we are recommending the following allocation.
This week reminded me of the "carrot and stick" metaphor. Since the end of July I’ve mentioned that the S&P 500’s major resistance line was at 3386, its record high close on 19 February of this year. We’ve closed that gap over the last two weeks, traded above it on an intraday basis, but failed to close above. In last week’s update, I mentioned that “we’re right about 1 percent away” from making a new record high. We cut that gap in half this week with the S&P 500 closing at 3372. On the economic front, we did have some good economic news reported this week. On Thursday new jobless claims dropped below 1 million for the first time since COVID started and on Friday, retail sales increased for three straight months resulting in total sales of $536 billion, a new record high. I’m hopeful these numbers and good news coming out of Wednesday’s FOMC meeting will build a stronger case for a breakout above that 3386 resistance line and allow us to get the carrot. For TSP TIPS, we know the C fund mirrors the S&P 500 index, but not exactly. Unlike the S&P 500, the C fund did cross it’s own resistance line and closed at a new record of $49.99 on Wednesday. To complement this, the S fund has outpaced the C fund by about 17 percent from the 23 March lows, and both have “A” performance rankings. Since this bullishness seems to be broadening, we are recommending the following allocation.