After hitting the top of the trading channel, stocks came right down to the bottom this past week. The sell off started on Wednesday after the Fed released the statement pointing significant risk to the economy and stirred investors' fear of double dip recession. The sell off continued to Thursday and handed stock markets the worst week since October 2008. The S&P 500 index closed this week at 1136 down 6.54%, the Dow Jones Industrial Average lost 6.41%, and the Nasdaq composite index decreased 5.3%.
The weekly chart of S&P 500 index shows that we are at the critical 1120 support level. The index fell to 1123 five weeks ago, and rebounded to top of the trading channel at 1216 last week. The silver lining is that at the same support level, the momentum indicator(STO) is higher right now than five weeks ago. I hope the index can successfully test this support, forms a classical double bottom, and slowly reverses the trend.
2 comments:
So how is the AMI calculated? The normal advice would be that someone nearing retirement would want a more conservative portfolio while someone not retiring for 30+ years would take more risk. Can this somehow be reflected in this type of investment plan?
AMI measures how far a fund price above or below its trend line is. An explanation of the AMI and trading strategies can be found in the "how to" page: https://sites.google.com/site/ycprankings/howto
The diversification of one's portfolio depends on his or her risk tolerance not the retirement ages. However, from the past performance, the ETF, sETF, and iETF ranking tables showed higher volatility than the other ranking tables.
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