Trading signal occurs in sETF model portfolio: Sell IEO, Buy IYW.
Selective default of Argentina's debt, bank trouble in Portuguese, and geopolitical tension in Ukraine and Gaza handed wall street the largest weekly drop the year. S&P 500 index fell to 1925, down 2.59%. Dow Jones Industrial Average lost 2.75%, and technology loaded Nasdaq composite index decrease 2.18% for the week.
As stock prices trending higher, they get more vulnerable to outside stimulus. In the weekly chart of S&P 500 index below, we can see the long red candles occurred 3 times this year. The first one in mid January, the second time in end of March and the third time this past week. In each time, the 28 week moving average was successfully tested and the index rebounded in a week of two. Currently, the 28 week moving average is at 1894 which is also the resistance level during March- May consolidation period. This 1890-1900 level should provide firm support to this pull-back and we hope that the market can rebound from there.
After hitting the $100 resistance in mid-June, IEO has been weak and has seen its momentum dropping. Its AMI rank dropped to 10 this past week, and we will replace it with the current number one ranked fund, IYW in the sETF ranking table. We have held IEO for 88 days with a profit of 1.4%.
 |
| Weekly Chart of S&P 500 Index |
No comments:
Post a Comment