1. Trading signal occurs in FEMKX timing system: Sell FEMKX, Buy CASH.
The announcement by FED Chairman Bernanke in his last meeting that FED is going to taper QE by 10 billion dollar in January but will keep interest rate low for longer than planned removed the uncertainty in the markets and power stocks to new highs. S&P 500 index closed at 1818, up 2.42%, Dow Jones Industrial Average gained 2.96%, and Nasdaq composite increased 2.59% for the week.
Two weeks ago, I said in the blog that we will see stocks paused for one or two weeks and take off to a new level afterwards. Now we may be in the beginning of that stock price movement as seen in the following weekly chart of S&P 500 index. If my prediction is correct, we should see stocks trending higher in the next few weeks before the inevitable correction similar to what had happened earlier this year in April and May.
Oversee markets including emerging markets have been week and could not find a sustained uptrend this year. The momentum index of FEMKX has fallen below 75 after 88 days of holding period. Following the trading rule, we will sell FEMKX and move to cash position with a loss of 0.71%. The system has under performed the US growth stocks this year.
 |
| Weekly Chart of S&P 500 Index |
 |
| Weekly Chart of FEMKX |
No comments:
Post a Comment