Trading signal occurs in iETF model portfolio: Sell EWY, Buy EWK.
Plunging oil prices handed stock market a brutal week. Oil price went below $36 a barrel, down 11% for the week. On Friday, Dow Jones Industrial Average tumbled more than 300 points. With the first rate hike by Federal Reserve on the horizon, investors rushed to sideline for a wait-and-see position. For the week S&P 500 index closed at 2012, down 3.798%, Dow Jones Industrial Average lost 3.268% while NASDAQ composite index decreased 4.06%.
 |
| Weekly chart of S&P 500 index |
A big plunge in stock prices has forced a long red candle in the weekly chart of S&P 500 index. The index has fell below its 28 week moving average. Again, it is the action after either a big jump or big loss that indicates the strength of the markets. Investors have anticipate a rate hike by Federal Reserve's FOMC meeting this coming Tuesday. Market reaction to the event is critical and will determine the direction for the next six months.
An trading signal occurs in iETF model portfolio, the average momentum indicator(AMI) of EWY has turned negative even though its AMI ranking is still above the threshold. We will replace the fund with the current number one1 fund, EWK, in the iETF ranking table. The model portfolio has held EWY for 46 days with a loss of 9.2%. Performance of iETF model portfolio has lagged the other model portfolios since its inception. Global funds have experienced larger volatility influenced by not only the market condition but also the currency exchange rate.
No comments:
Post a Comment