Trading signal occurs in RSP model portfolio: Sell 05087, Buy FDGRX
Trading signal occurs in FEMKX timing model: Sell Cash, Buy FEMKX
Fed surprised Wall street by delaying the tapering of QE in Wednesday's policy meeting and stocked surged to multi-year high. Stocks gave up some gain later in the week and ended up higher for the third week. S&P 500 index closed at 1709, up 1.30%, Dow Jones Industrial Average gained 0.49%, and Nasdaq composite increased 1.41% for the week.
Weekly chart of S&P 500 index shows that the index has bounced off the trend line and is gaining momentum. The rally is expected to continue based on the technical reason. However, the uncertainty and worries about government's budget and debt limit could throw a wrench to the stock market.
We have two trading signals in the model portfolios this week. In RSP model portfolio, the rank of LSV large cap value equity fund (05087) has been pushed down below rank 7 and is replaced with Fidelity Growth Company Fund (FDGRFX). In the FEMKX timing system, the momentum of FEMKX has been very strong in the past 3 weeks after it formed a "W" shape double bottom in the weekly chart and broke above its 28 week moving average. Its STO indicator has climbed above 50 and a buy signal is generated.
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| Weekly chart of S&P 500 index |
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| Weekly chart of FEMKX |
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