Trading signal occurs in ETF model portfolio: Sell IGW, Buy IGN.
Investors sold their holdings to lock in their profit and stalled the stock rally since March. The S&P 500 index closed at 882, down 5.0%, and the Dow Jones Industrial Average decreased 3.6% for the week, while the Nasdaq composite index lost 3.4%. Emerging market sector held up pretty well this past week.
Last week we talked about the S&P 500 index's breaking above its trend line (the resistance level at that time) and that to establish a robust uptrend, it needs to come back down to successfully test the trend line (the support level, now). The chart below shows that the index is in the process of testing the support level right now. Until it run through its course, we won't know how long this process will take and whether it will be successful or not.
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