YCP ETF and Mutual Fund Rankings: March 2020

Fund Rankings Update, 3/27/2020

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, as well as in http://ycprankings.awardspace.us/RankingTables.htm.

Encouraged by aggressive monetary policy from the Fed and the $2 trillion stimulus package from US government, stocks rebounded sharply this past week. For the week, S&P 500 index shot up 10.3% to 2541, Dow Jones Industrial Average gained 12.8% , and the technology laden NASDAQ composite index increased 9.1%.

S&P 500 index rebounded sharply for 3 days after briefly touching the 2200 level twice (forming a W bottom on the hourly chart) on Monday. It went up to 2630 before settling on 2540 to close the week. Immediately above, there are a short term resistance at 2700-2750, and a higher level resistance at around 2820 if the index can get there. It is likely from the chart, that S&P 500 index may attempt to consolidate between 2300 to 2700 channel before the next move. As discussed last week, we are in a bear territory and the recovery will take a long period of time. However it is a good time to evaluate your portfolio composition and make adjustments at the resistance and support levels.

Weekly chart of S&P 500 index

Fund Rankings Update, 3/20/2020

Trading signal occurs in SELECT model portfolio: Sell FSPTX, Buy FDRXX

As fear for coronavirus deepened, and state governors as well as city majors announced closing of schools, restaurants, and public facilities, stocks suffered another week of steep loss. S&P 500 index fell below its 2018 low and DJIA reached the low not seen since 2016. For the week, S&P 500 index went down 15% to 2304, Dow Jones Industrial Average lost 17.3% , and the technology laden NASDAQ composite index decreased 12.64%.

After another week of high volatility and relentless selling, S&P 500 index has broken the 2400-2350 support. Its momentum indicator, STO, has fallen to 16.4, officially entering the oversold region. To find the major support levels, I plotted the fibonacci retracements for this bull market since 2009 in the picture below. The current 11-year bull market runs from March 2009 to February 2020 with S&P 500 went from 750 to 3400. The first support is the 38% retracement line at 2350, which was broken this week. The next support level is at 2000 with 50% retracement and the third support level is the 61% retracement at 1700. There may be minor supports (eg. 2100 level) in-between these major supports. The index usually stabilizes at one of these support levels before getting on its recovery. While it may be too early to discuss about recovery right now. we did discussed the "W" shape bottoming pattern, and buying when STO comes out of the oversold region before. With the sell-off this intense and this fast, it will take a long period time for the market to recover. We just have to patiently wait for the index to stabilize at the support level, form the bottoming pattern and climb out of the oversold region.

Fibonacci analysis of S&P 500 index

Fund Rankings Update, 3/13/2020

Trading signal occurs in SSPP model portfolio: Sell FBGRX, Buy Cash
Trading signal occurs in HSA model portfolio: Sell MLAIX, Buy IUTIX
Trading signal occurs in ETF model portfolio: Sell IYW, Buy Cash
Trading signal occurs in sETF model portfolio: Sell IYW, Buy Cash
Trading signal occurs in iETF model portfolio: Sell IOO, Buy Cash
Trading signal occurs in RSP model portfolio: Sell FDGRX, Buy 05088 (Blkrk US Debt index)

Fear of coronavirus spread and worried about US government's slow response during mid-week handed Wall street its worst week in history. Major indices plunged more than 25% from its recent high to the low on Thursday. President Trump announced national emergency on Friday and pushed the DJIA up 2000 to lighten the damage due to the sharp sell-off. For the week, S&P 500 index went down 8.79% to 2711, Dow Jones Industrial Average lost 10.06% , and the technology laden NASDAQ composite index decreased 8.17%.

After a directionless week, S&P 500 index gaped down and fell below the 2820 resistance to reach the low of 2478, very close to the 2400 support level in 2018. So far, the initial stock market reaction has been very similar to the stock crash in late 2018 as seen in the weekly chart: An indecision week occurred after the first week of sell-off then followed by the second week of panic sell-off. S&P 500 index stabilized afterwards for a few weeks with high volatility before its final leg down to complete the bear market. If the index behaves the same way as it did in 2018, we will expect another sell-off a few weeks down the road when everyone think the market has stabilized. No one can predict the future, but the damage has been done and we know the recovery will take some time. The momentum indicator STO is approaching the oversold region, and likely to become oversold next week. It is wise to stay on the sideline before the STO indicator climbing out of the oversold region.

This week all our model portfolios have moved their positions to either cash or bond funds except SELECT model portfolio, which still holds technology sector fund, FSPTX, due to one month holding period rule. Once the rule is fulfilled next week, we expect the SELECT model portfolio will move to cash position as well.

Weekly Chart of S&P 500 Index

Fund Rankings Update, 3/6/2020

Stocks still experienced large swings and ended up directionless due to fear of coronavirus spread and Fed's surprised emergency half point rate cut. For the week, S&P 500 index went up 0.61% to 2972, Dow Jones Industrial Average gained 1.79% , and the technology laden NASDAQ composite index increased 0.1%.

S&P 500 index rebounded early in the week from the sharp plunge the previous week. It retreated after reaching the 28 week moving average (now the resistance) and ended up about where it began. It usually takes several weeks for the index to build a base before completing the correction phase after a severe sell-off. For example, looking back at October 2018 sell-off in the weekly chart below, S&P 500 index took 9 weeks trading between 2600-2800 channel before the final leg down to complete the correction phase. From daily and weekly chart, we expect the index likely to trade within 2820 - 3130 for a few weeks before it completes the correction.

Weekly chart of S&P 500 index