The first full week of October trading saw the S&P 500 notching its best week since early July, closing Friday at 3477. COVID relief stimulus talks seemed to buoy up the markets with the gap closing between the two parties, although a final package may not be complete before the election. From a technical perspective, we have seen the S&P 500 break out of the consolidation range we mentioned last week, and it is just short of hitting a new high. However, this also looks like the same setup we had on 1 September when the S&P 500 made its last record high. On that day the S&P 500’s had an overbought condition with the Bollinger Band and Stochastics indicators at 72 and 97 respectively, which then started September’s downward trend. On Friday those Bollinger Band and Stochastics numbers were also at 72 and 97. That said, we have seen a positive bullish rotation into the Small and MidCap sectors as evidenced by their improving Performance Rankings. For TSP TIPS, our last allocation increased our S fund exposure by 15 percent. With the S fund making new record highs on Wednesday through Friday, we’re going to take further advantage of this rotation and recommend increasing the S fund allocation by another 15 percent.
The first full week of October trading saw the S&P 500 notching its best week since early July, closing Friday at 3477. COVID relief stimulus talks seemed to buoy up the markets with the gap closing between the two parties, although a final package may not be complete before the election. From a technical perspective, we have seen the S&P 500 break out of the consolidation range we mentioned last week, and it is just short of hitting a new high. However, this also looks like the same setup we had on 1 September when the S&P 500 made its last record high. On that day the S&P 500’s had an overbought condition with the Bollinger Band and Stochastics indicators at 72 and 97 respectively, which then started September’s downward trend. On Friday those Bollinger Band and Stochastics numbers were also at 72 and 97. That said, we have seen a positive bullish rotation into the Small and MidCap sectors as evidenced by their improving Performance Rankings. For TSP TIPS, our last allocation increased our S fund exposure by 15 percent. With the S fund making new record highs on Wednesday through Friday, we’re going to take further advantage of this rotation and recommend increasing the S fund allocation by another 15 percent.