Trading signal occurs in SELECT model portfolio: Sell FBIOX, Buy FSAIX.
Stocks took a pause after reaching record high with mixed results. S&P 500 index closed at 1761, up 0.118%, Dow Jones Industrial Average gained 0.29%, while Nasdaq composite decreased 0.54% for the week.
Sector rotation can be observed in the SELECT ranking table: Air transportation, wireless communication defense, and natural gas have been gaining momentum while automotive, technology and biotech have lost their shine. FBIOX was pushed out of the rank 7 in SELECT ranking table and a trading signal was issued in our model portfolio to sell the fund and buy into the current number one ranked fund, FSAIX. We have hold FBIOX for about 6 months with a gain of 16%.
S&P 500 index is trading near the top of the rising channel as shown in the weekly chart below. Past experience has told us that stocks marched in a waved pattern and has never gone up in straight line. A slowdown or pull back is deemed to happen, however, severe and prolonged down turn is nowhere to be seen at this moment.
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| Weekly Chart of SP 500 Index |
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