YCP ETF and Mutual Fund Rankings: October 2008

Fund Rankings Update, 10/31/2008

Weekly Average Momentum Index (AMI) rankings of SSPP, nSSPP, SELECT, ETF have been posted at: http://yechen.pan.googlepages.com/

Market stabilized a bit in the past week as credit liquidity got better with effort from FED and treasury department. S&P 500 index went up 10.5% last week, but for the month of October it still lost 16.8 %. The weekly chart of S&P 500 index shows that its price is far below the 28 week moving average and its stochastic is at 19. This puts it well in the bear territory.

iETF and sETF rankings update, 10/28/2008

Rankings of Average Momentum Index(AMI) for iETF and sETF have been posted at : http://yechen.pan.googlepages.com/

Fund Rankings Update, FEMKX, 10/24/2008

Weekly Average Momentum Index (AMI) rankings of SSPP, nSSPP, SELECT, ETF have been posted at: http://yechen.pan.googlepages.com/

Another tough week for stock markets with Dow lost 5.4%, S&P lost 6.8% and NASDAQ lost 9.3%. For the year, Dow has dropped 37%, S&P has lost 40% and NASDAQ has lost 41%. Investors still do not have a clue where the bottom is.

In addition to the six ranking tables, I also provide one timing model using Fidelity's emerging markets fund (FEMKX) in this blog. I uses my favorite technical indicator, stochastics, to determine when to buy and sell the fund. This indicator has been very reliable in the past few years and has successfully saved us from this market meltdown. You can find the timing rule from my earlier blog labeled "How To".

iETF and sETF rankings update, 10/21/2008

Rankings of Average Momentum Index(AMI) for iETF and sETF have been posted at : http://yechen.pan.googlepages.com/

Fund Rankings Update, 10/17/2008

Weekly Average Momentum Index (AMI) rankings of SSPP, nSSPP, SELECT, ETF have been posted at: http://yechen.pan.googlepages.com/

Asset allocation is important to weather the market's up and down. As of today, I have provided 6 ranking tables, SSPP, nSSPP, SELECT, ETF, iETF and sETF. SSPP contains 31 funds in my company's old 401k plan, and nSSPP contains 38 funds in my company's current 401k plan. These funds are more conservative except a handful of specialty funds. SELECT contains 42 Fidelity's sector funds. These funds, in my opinion, have medium volatility because their prices are updated once a day. As you can see, a lot of funds are from Fidelity's mutual fund family. This is because I have been with Fidelity for 20 some years and their fund selections are the largest in the industry. ETF, iETF, and sETF contains specialty index funds with iETF focuses on international index funds and sETF specializes in sector index funds. These funds are traded like stocks hence with higher volatility. ETF are very popular in the past few years because of its tax efficiency, and if traded properly, can provide higher return. One way to diversify is to assign different percentage of your total investment to follow different ranking tables. For example, a conservative approach may assign 70% to SSPP rankings, 20 % to SELECT, and 10% to ETF, while a more aggressive approach may assign 40% to SSPP rankings, 40% to SELECT and 20 % to ETF.

iETF and sETF rankings update, 10/14/2008

Rankings of Average Momentum Index(AMI) for iETF and sETF have been posted at : http://yechen.pan.googlepages.com/

Fund Rankings and FEMKX Update, 10/10/2008

Market continued its sell-off and collapsed in the past week. For the week, DJIA and S&P 500 indices have both lost 18 % and NASDAQ has lost 15%. They were worse than a week before, and we thought it was already pretty bad a week ago in my blog. Market sentiment could not be worse. None of the funds in the ranking tables has positive AMI except Promark Income Fund in the N-SSPP ranking table. Have we reached the bottom yet? Only time will tell. This bear is so ferocious, it will last a while and the recovery will take some time to hold.

I hope you are mostly holding cash in the sideline and patiently wait for the market to reverse itself. If you are in this market, do not sell your holdings into the panics. With such strong sell-off, the market deems to rebound along the way. Those will be good time for you to sell your holdings as those rallies will be short lived. Do not afraid to take the loss. Since we do not know how long this bear will last, stay at the sideline will at least make you sleep better at night. There will be always a bull market sometime in the future. We have discussed how to identify the longer term market reversal in the previous blog. When the time comes, we will be ready and will ride the wave up again.

Here is an update for our FEMKX timing model. We have sold FEMKX and moved to sideline since 6/13/2008. FEMKX closed this week at $14.06. An 2.9% loss at that time has saved us a bundle!!

FEMX Trading Log

Fund    Buy On    Buy@    Sell On    Sell@    P/L
FEMKX  03/26/07  $25.15  08/06/07   $29.53   17.42%
FEMKX  09/10/07  $28.98  12/28/07   $33.82   16.71%
FEMKX  04/28/08  $31.73  6/13/08    $30.81   -2.90%
CASH   06/13/08  $1.00

Weekly Average Momentum Index (AMI) rankings of SSPP, nSSPP, SELECT, ETF have been posted at: http://yechen.pan.googlepages.com/

iETF and sETF rankings update, 10/07/2008

Rankings of Average Momentum Index(AMI) for iETF and sETF have been posted at : http://yechen.pan.googlepages.com/

Trading signal occurs in sETF model portfolio: Sell IBB, Buy CASH.

Since this bear market is similar to 2000-2002 bear market, let's review the monthly chart of IVV for the past 10 years. IVV is an iShare exchange traded fund mimicking S&P 500 index. The 2000-2002 bear market was attribute to the burst of .com bubble. The price of IVV went down from its high of $152 in August 2000 to the low of $80 in September 2002. It lost 47% of its value in the span of 2 years. The monthly stochastic dipped below 50 in Nov. 2000 and stayed below 50 til July 2008 when it climbed above 50 and confirmed the long term bull market.

Figure 1

This bear market started in October 2007 due the burst of housing bubble. The housing problem rippled through financial sectors and affected the whole economy. The long term bear trend was confirmed in February this year when IVV's monthly stochastics fell below 50. This bear is now one year old and have lost 32 % so far. We do not know how long it will last and how low it will keep going down. The next bull market will not come until the monthly stochastics climbs above 50 again.

Fund Rankings Update, 10/3/2008

Weekly Average Momentum Index (AMI) rankings of SSPP, nSSPP, SELECT, ETF have been posted at: http://yechen.pan.googlepages.com/

Trading signal occurs in ETF model portfolio: Sell IBB, Buy DVY
Trading signal occurs in SELECT model portfolio: Sell FBIOX, Buy FSRBX

Panic swept through wall street in the past week. DJIA tanked 7 % and NASDAQ loss 10% in a week! From SSPP Trading Log, they both sank to the level unseen since June 2004. It seems that a long hard winter is ahead of us. Hope the 700 billion bailout plan can work its magic to provide some cushion to the economy and stock market.