Good afternoon and welcome to this guest update. For those who don’t know me, I’m Jacqueline Smith, Scott’s daughter. I’ve learned a great deal about his technical approach over the years and he’s asked me to share our current analysis while he is on a well-deserved retreat to some of our beautiful National Park Service sites. 

As dedicated followers of this blog know, we base our Thrift Savings Plan (TSP) allocation decisions on a disciplined technical analysis approach. Currently, our entire TSP equity exposure remains allocated to the S Fund, and this morning, June 11, 2025, our indicators continue to affirm this position. New contributions, as part of our broader risk management for fresh capital, are being directed to the G Fund.

Let’s dive into the current market environment and how recent news aligns with our technical assessment.

Current Market Landscape: Signals We’re Watching

The broader financial markets are providing several signals that, from our technical viewpoint, support maintaining our S Fund exposure for existing capital. The theme this week is quiet strength, as markets digest economic data ahead of key policy decisions.

• Major Indices Show Bullish Strength: As of Tuesday’s close (June 10th), major U.S. stock indices continued their advance. The S&P 500 rose 0.5% to close at 6,038.81, placing it less than 2% from its all-time high. The tech-heavy Nasdaq also gained 0.6%. From a technical perspective, when broad market indices show this kind of strength and challenge record highs, it confirms a healthy risk appetite among investors, which is a supportive environment for growth-oriented segments like the small-cap stocks in the S Fund.
• Favorable Inflation Data: A key piece of news this morning was the release of the Consumer Price Index (CPI), a critical inflation gauge. As noted in Schwab’s Market Open Update, the CPI came in slightly below expectations. Softer inflation data is generally viewed positively by the market, as it can influence the Federal Reserve’s stance on interest rates. This positive economic surprise has contributed to market strength today and does not present a technical reason to exit our current equity positions.
• Small-Cap Performance (S Fund Proxy): The Russell 2000 Index, which serves as a benchmark for the small-cap stocks held in the S Fund, also advanced on Tuesday, closing at 2,156.41. This is a crucial observation, as it shows that small caps are participating in the market’s upward trend. While some longer-term analysis from outlets like CME Group notes that small-caps have lagged large-caps over the past year, our technical focus is on the current trend. The recent positive price action, coupled with the S Fund’s own strong 7.21% gain in May (as reported by outlets like YCharts), provides technical confirmation that our holding remains sound.
• Trade & Geopolitical Backdrop: Investors continue to monitor developments from the ongoing U.S.-China trade talks. The current market reaction suggests an expectation of stability, if not outright positive progress. Our technical models are designed to interpret price action, not predict headlines. The fact that the market is climbing despite these ongoing discussions indicates that, for now, the trend is overpowering the uncertainty.

Our Technical Discipline: Why We Remain in the S Fund

Our decision to remain 100% allocated to the S Fund for our existing TSP equity investments is not based on guesswork. It is driven by a specific set of technical indicators that currently signal a continued uptrend, or at minimum, the absence of a confirmed sell signal for the small-cap sector.

These indicators include:

• Trend Analysis: Key moving averages that we track for the S Fund’s underlying benchmarks remain in a bullish configuration. The price is holding above critical support levels that we’ve identified.
• Momentum Oscillators: Our intermediate and longer-term momentum indicators for the S Fund have not yet signaled a significant loss of upward momentum that would warrant an exit. The market is not showing signs of being excessively overbought at these levels.
• Volume Confirmation: We analyze volume patterns in the broader small-cap market. We are not seeing the kind of heavy, distributive (selling) volume that typically precedes a major downturn.

Crucially, our commitment is to follow these indicators rigorously. When they signal that the risk/reward profile has shifted and an exit from the S Fund is warranted, we will act decisively and communicate that through this blog. Of course, if you are doing something different that is working for your situation you will have no judgement from us. Keep doing what is best for you!

New Contributions to the G Fund: A Note on Prudence

While our existing capital remains confidently in the S Fund based on its current technical merits, we continue to advise that new contributions from payroll deductions be directed to the G Fund. This is a prudent measure for managing new capital, ensuring its preservation while we await optimal technical conditions for its deployment or until our primary S Fund position signals a change. This strategy separates the management of existing trend-following positions from the cautious allocation of fresh funds.

Staying the Course

In summary, the current market news, when viewed through our technical analysis framework, supports our ongoing position in the S Fund. We are encouraged by the market’s resilience and the positive reaction to recent economic data. Rest assured, we are diligently monitoring our indicators and will provide updates as market conditions and our signals dictate.

(Disclaimer: This is a guest blog post and reflects a specific technical analysis viewpoint. It should not be considered financial advice. Consult with a qualified financial advisor for decisions pertinent to your individual situation.)