Stocks advanced for the fourth week. The S&P 500 index closed at 842, up 3.6%, the Dow Jones Industrial Average increased 3.1% and the Nasdaq composite index gained 5.0% for the week. The STO[15,1] (stochastics) of S&P 500 index has crossed above 50 while the price is a bit below the 28 week exponential moving average. It will be a good sign if the index can stabilize at this level to buid a fundation. Although stocks have gone up more than 20% from its bottom in late February, they might just get back to the level where they supposed to be. Stocks price tends to overshoot in both ways, and in February the stock market was in an extremely oversold condition due to investors' panic about depression.
After holding the cash for more than six months, the SELECT model portfolio has issued a buy signal this week. We will buy FWRLX becasue the AMI rank of FSLXX (money market fund) has dropped below 7. Funds in other ranking tables have not reacted to the recent rally as fast of funds in the SELECT rankings table. We are still holding cash for these model portfolios. From the weekly chart of FWRLX, the price has climbed above its 28 week exponential moving average and it STO[15,1] is well above 50.
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