YCP ETF and Mutual Fund Rankings: July 2022

Fund Rankings Update, 7/29/2022

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.

Stocks rose substantially higher after FED raised the interest rate 0.75% on Wednesday as expected. Second quarter GDP came in negative 0.9% more than the expected 0.5% contraction as economic slow down took holds. With the contraction in two consecutive quarterly GDPs, investors think that the FED will slow down the pace for rate hikes or stop the rate hikes sooner, which extend the stock rally. For the week, S&P 500 index went up 4.26% to 4130, Dow Jones Industrial Average gained 2.97%, and the technology laden NASDAQ composite index increased 4.7%.

As discussed last week, S&P 500 broke above 3900 after the Fed raises the interest rate and closed 10 point below its 28 week EMA. As the momentum indicator keeps rising, the index will most likely break above its trend line in the coming weeks. The best scenario going forward is for the index to retest its trend line support after breaking it and continue to advance higher toward the end of the year.

Weekly chart of S&P 500 index

Fund Rankings Update, 7/22/2022

With commodity prices and oil prices came down substantially in the recent weeks and better than expected second quarter earning reports from some prominent companies, stocks climbed higher for the past week: S&P 500 index went up 2.55% to 3961, Dow Jones Industrial Average gained 1.95%, and the technology laden NASDAQ composite index increased 3.33%.

S&P 500 broke the consolidation pattern and closed above the 3900 upper bound formed in the last 5 week. If the index can hold it above 3900 after the Fed raises the interest rate next week in its policy meeting, we will see the index challenging its 28 week EMA resistance. With the rising momentum indicator which has climbed above over-sold region in the last 3 weeks, we may see the index breaking above its trend line the first time after more than 3 months.

Weekly chart of S&P 500 index

Fund Rankings Update, 7/15/2022

Stocks retreated as investors focused on high inflation data with Consumer Price Index (CPI) rose to 9.1% in June. Wall street now expect the FED will raise interest rate by 75 basis point in their July meeting. For the week, S&P 500 index went down 0.93% to 3863, Dow Jones Industrial Average lost 0.16%, and the technology laden NASDAQ composite index decreased 1.57%.

S&P 500 consolidated around 3800-3900 for another week but forming a bullish hammer candle stick pattern with a long wick and a short body. The index went down near 3720 in mid-week, but came back strong to finish the week a bit below where it stated with. The FED's next policy meeting is on July 26 and 27. Wall Street analysts have priced in a 0.75% rate hike from FED at that meeting, and we don't expect much stock movement before the announcement.

Weekly chart of S&P 500 index

Fund Rankings Update, 7/8/2022

Trading signal occurs in SELECT model portfolio: Sell, FSENX, Buy FDRXX
Trading signal occurs in ETF model portfolio: Sell, IYE, Buy FXI
Trading signal occurs in sETF model portfolio: Sell, IEO, Buy IHE

Stocks reversed its downward course on the optimism that the FED will tame the inflation without driving the the economy into recession. On Wednesday, Institute for Supply Management (ISM) released its estimates of services activity in June showing a continuation of slowdown in economic growth, and on Friday, the Labor Department's payroll data showed US economy added 372K jobs in June better than the expectation of 270K. For the week, S&P 500 index went up 1.94% to 3899, Dow Jones Industrial Average gained 0.77%, and the technology laden NASDAQ composite index increased 4.56%.

S&P 500 consolidated around 3800-3900 level this week. The momentum indicator STO has formed a "W" bottom and a bullish divergent pattern: The index is making lower lows in May and June, while the STO is making higher lows. As the index look to be forming a bottom right now, the final confirmation will come when the index breaks above its 28 week EMA.

Three trading signals were issued this week in our model portfolios due to the recent decline in oil prices. However, no leadership sector has emerged, and most of our model portfolios are still in cash positions waiting for the right time to buy.

Weekly chart of S&P 500 index

Fund Rankings Update, 7/1/2022

Stocks gave back portion of its large gain from previous week as investors worried about recession looming on the horizon. Economic data showed consumer purchase fell 0.4% in May and the Atlanta Fed’s GDPNow model, if confirmed, indicates that we are already in recession with two consecutive negative quarterly GDP growth. For the week, S&P 500 index went down 2.21% to 3825, Dow Jones Industrial Average lost 1.28%, and the technology laden NASDAQ composite index decreased 4.13%.

The silver lining of the decline in S&P 500 index this week is that it still closed above the 3800 resistance. If the index can hold at this level, it may signal the start of bottoming process. Since the index has come down a warping 21% from its high in January 2022, we think a "U" shape or "W" shape bottom is more likely than a "V" bottom formation. A bullish divergence in momentum indicator and a bottoming formation are the signs of reversal we are looking for.

Weekly chart of S&P 500 index