It was a bullish week for the markets as the S&P 500 bounced off their most recent lows and closed Friday at 4463. The big news this week was that the Fed reversed their course of low interest rates, raising them on Wednesday. Overshadowing that, the war between Russia and Ukraine has now been ongoing for about a month also casting uncertainty on the markets. However, given those two critical items, the markets reversed their course for the best week since November 2020. From a technical perspective, recent market action is reminiscent of the last two pandemic weeks in March 2020. On 23 March 2020 the S&P 500 had dropped to a low of 2237 after numerous daily losses of over 1%, including a drop of 11.98% on 16 March 2020. That said, the S&P 500 bounced off that bottom having over 1% percent moves on each of the next ten days, closing at 2663 on 4 April 2020 and setting the stage for a bullish run through 2021-year end. On 3 January 2022 the S&P 500 hit a new record high of 4796, then corrected to a near Year to Date low of 4173 on Monday. Even given the interest rate and geopolitical environment, the S&P 500 had bullish 1% or greater moves on the last four days of this week, which could be the start of another bullish run. What has also been nice this week is that the NASDAQ 100 has come out of bear market territory. For TSP TIPS, the C fund has mirrored the course of its S&P 500 underlying index. Two weeks ago we mentioned we would get back in the market if a fund 1) must have a positive Performance Ranking and 2) using a set of two short-term Moving Averages (MA), 2a) the fund price must be above both those MA's and 2b) those two MA's are sloping upward. Well, that happened this week and we are recommending the following reallocation.
It was a bullish week for the markets as the S&P 500 bounced off their most recent lows and closed Friday at 4463. The big news this week was that the Fed reversed their course of low interest rates, raising them on Wednesday. Overshadowing that, the war between Russia and Ukraine has now been ongoing for about a month also casting uncertainty on the markets. However, given those two critical items, the markets reversed their course for the best week since November 2020. From a technical perspective, recent market action is reminiscent of the last two pandemic weeks in March 2020. On 23 March 2020 the S&P 500 had dropped to a low of 2237 after numerous daily losses of over 1%, including a drop of 11.98% on 16 March 2020. That said, the S&P 500 bounced off that bottom having over 1% percent moves on each of the next ten days, closing at 2663 on 4 April 2020 and setting the stage for a bullish run through 2021-year end. On 3 January 2022 the S&P 500 hit a new record high of 4796, then corrected to a near Year to Date low of 4173 on Monday. Even given the interest rate and geopolitical environment, the S&P 500 had bullish 1% or greater moves on the last four days of this week, which could be the start of another bullish run. What has also been nice this week is that the NASDAQ 100 has come out of bear market territory. For TSP TIPS, the C fund has mirrored the course of its S&P 500 underlying index. Two weeks ago we mentioned we would get back in the market if a fund 1) must have a positive Performance Ranking and 2) using a set of two short-term Moving Averages (MA), 2a) the fund price must be above both those MA's and 2b) those two MA's are sloping upward. Well, that happened this week and we are recommending the following reallocation.