This week we saw the markets have a lot of “Gap Opens”, but at week’s end the S&P 500 closed little changed at 3483. Market indices usually open “close” to there where they “closed” the previous trading day, providing some continuity. A “Gap Open” occurs when there is a shift in investor sentiment while the market is closed, causing the index to have a “Gap Open” the following trading day. For instance, on Friday 9 October, the S&P 500 closed at 3477. When the S&P 500 opened on Monday, it had jumped to 3500 with a “Gap Open to the upside” of plus 23 points. Conversely, we had an “Gap Open to the downside” on Thursday when the S&P 500 opened lower than Wednesday’s close. However, it should be noted that even given all those gaps this week, S&P 500 finished the week within six points of the previous Friday. COVID and the Stimulus Bill continue to dominate the headlines, along with the uptick in election news as 3 November approaches. This week we also saw better than expected retail sales numbers, and the return of the Boeing 737 Max jet after the European Union Aviation Safety Agency said it was safe to fly again. Next week economic news is a little light and earnings season continues, and I’d expect more of the same with the markets. Friday’s market sell off during the final hour of trading could lead to another “Gap Open” on Monday. For TSP TIPS, the S fund hit another new high this week while the C and I equity funds are just shy. As such, we’ll keep our current allocation but remain prepared to make further moves once election uncertainty comes out of the equation.
This week we saw the markets have a lot of “Gap Opens”, but at week’s end the S&P 500 closed little changed at 3483. Market indices usually open “close” to there where they “closed” the previous trading day, providing some continuity. A “Gap Open” occurs when there is a shift in investor sentiment while the market is closed, causing the index to have a “Gap Open” the following trading day. For instance, on Friday 9 October, the S&P 500 closed at 3477. When the S&P 500 opened on Monday, it had jumped to 3500 with a “Gap Open to the upside” of plus 23 points. Conversely, we had an “Gap Open to the downside” on Thursday when the S&P 500 opened lower than Wednesday’s close. However, it should be noted that even given all those gaps this week, S&P 500 finished the week within six points of the previous Friday. COVID and the Stimulus Bill continue to dominate the headlines, along with the uptick in election news as 3 November approaches. This week we also saw better than expected retail sales numbers, and the return of the Boeing 737 Max jet after the European Union Aviation Safety Agency said it was safe to fly again. Next week economic news is a little light and earnings season continues, and I’d expect more of the same with the markets. Friday’s market sell off during the final hour of trading could lead to another “Gap Open” on Monday. For TSP TIPS, the S fund hit another new high this week while the C and I equity funds are just shy. As such, we’ll keep our current allocation but remain prepared to make further moves once election uncertainty comes out of the equation.