Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, nSSPP, SELECT, ETF, iETF, sETF have been posted at http://yechen.pan.googlepages.com/
Thursday I saw on "Mad Money" (yes, I do watch the show once a while) that Jim Cramer agreed with me that investors were looking for reasons to sell stocks. During the week, we have seen the great company earning reports and last quarter's high GDP (5.7%) number failed to give market a boost. Instead, the negative sentiment prevailed and the stock markets continued their slides from the week before. The S&P 500 index closed this week at 1073, down 1.6%, the Dow Jones Industrial Average decreased 1.0%, and the Nasdaq composite index lost 2.6% for the week.
Going forward, the fundamental of the economy is still looking positive. Companies are making money, and will start hiring people. When people have jobs they will start buying houses. It is just that simple. The good time may not come right away, but it will arrive eventually. From technical point of view, the monthly chart has indicated that we are in the beginning of the multi-year up trend. So I will treat this sell-off as a correction for the rally since last March. The stock markets need to take a break to digest their gain for the past 10 months, and in this respect, the correction may be a good chance for people who have missed the rally to get back in. In the weekly chart of S&P 500 index below, the STO has fell below 75 and looks to break below 50, so the downside risk is higher than the up side. However, the price has broken its 13 week trend line and is approaching its 28 weeks support line so we may see some rebound next week. We won't know the extent and the duration of this correction until it is over.
(click picture to enlarge)
Here is the monthly update for our FEMKX timing system. We will buy FEMKX if its STO[15,1] climbs above 50, hold at least for a month, and sell it if its STO[15,1] falls below 75. We bought FEMKX on 3/30/09 at $12.31. We sold FEMKX this Monday at $21.96 with a gain of 78.4% after holding it for 301 days. Right now, we are holding cash since its STO[15,1] stands at 48.8.
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 3/27/09 $1.00 0.0%
FEMKX 03/30/09 $12.31 1/25/10 $21.96 78.4%CASH 1/25/10 $1.00
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