Todays broad market sell-off triggered four technical signals which define the current weakness across the three TSP equity funds (C/S/I). First, all three funds closed below their 50 day Moving Averages. Second, all three closed more than 2.5% below their record highs. Third, all three have seen their Performance Ranking drop to a C grade. With a C grade, a sell signal is generated if a) the price is below their 8 and 32 day Moving Averages and b) both the 8 and 32 day Moving Averages are sloping down. Now, lets focus on just the S&P 500. This past weekend I mentioned that the S&P 500 stands just above the mid-point between the last S&P 500 record high of 4536 and subsequent low of 4354. It appears as if we are consolidating into a channel and the next move will be a breakout with the follow-on question being Which direction?. Well, that direction was defined today when the S&P 500 closed at 4352.63, below the previous low of 4354.19. it should also be noted that the S&P 500s 32 day Moving Average has been upward sloping since November of 2020. However, this week that slope reversed to the downside. Given this environment, we are recommending a further reduction in the TSP TIPS equity allocation as follows:
Todays broad market sell-off triggered four technical signals which define the current weakness across the three TSP equity funds (C/S/I). First, all three funds closed below their 50 day Moving Averages. Second, all three closed more than 2.5% below their record highs. Third, all three have seen their Performance Ranking drop to a C grade. With a C grade, a sell signal is generated if a) the price is below their 8 and 32 day Moving Averages and b) both the 8 and 32 day Moving Averages are sloping down. Now, lets focus on just the S&P 500. This past weekend I mentioned that the S&P 500 stands just above the mid-point between the last S&P 500 record high of 4536 and subsequent low of 4354. It appears as if we are consolidating into a channel and the next move will be a breakout with the follow-on question being Which direction?. Well, that direction was defined today when the S&P 500 closed at 4352.63, below the previous low of 4354.19. it should also be noted that the S&P 500s 32 day Moving Average has been upward sloping since November of 2020. However, this week that slope reversed to the downside. Given this environment, we are recommending a further reduction in the TSP TIPS equity allocation as follows: