YCP ETF and Mutual Fund Rankings: January 2016

Fund Rankings Update, 1/29/2016

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, and http://ycprankings.awardspace.us/RankingTables.htm.

Stocks rebounded for the second week. A surprise rate cut bringing the interest rate below zero from Bank of Japan on Friday boosted the stock market to the upside. Weak fourth quarter US GDP of 0.7% also eased the concern of Fed's raise interstate in the near future. For the week S&P 500 index closed at 1940, up 1.75%, Dow Jones Industrial Average gained 2.32% while NASDAQ composite index increased 0.5%.

Weekly chart of S&P 500 index

After the "Hammer" candle pattern showed up last week in the weekly chart, the S&P 500 index rose higher and seems to be forming a bottom. The optimistic scenario is for the index to form a "W" shape double bottom in the next few weeks and reach the sliding 28 week moving average. Afterwards, whether the index will go higher or lower will depend on the market condition and investor sentiment at that time. The short term resistance and support levels to observe are the 1975 - 2000 resistance level from above and the 1875 support level on the downside..

Fund Rankings Update, 1/22/2016

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, and http://ycprankings.awardspace.us/RankingTables.htm.

Trading signal occurs in SSPP model portfolio: Sell FRESX, Buy Cash

Stocks rebounded at the end of this holiday shortened week. Stock markets are still largely influenced by oil prices. Investors did not pay too much attention to mixed US economy data on housing and unemployment claims. Oil prices, on the other hand, went down below $28 early in the week and drag the stock markets down to the earlier 2014 level before rebounding later in the week. For the week S&P 500 index closed at 1906, up 1.41%, Dow Jones Industrial Average gained 0.66% while NASDAQ composite index increased 2.29%.

Weekly chart of S&P 500 index

In the weekly chart, S&P 500 index has displayed a "Hammer" revers candle pattern. In the past, the pattern has signaled the end (or near the end) of the correction. The index went down to 1820, the 15% correction level, mid week under the residual selling pressure from last two weeks. It rebounded after briefly touched the level on Wednesday and went right up for two days as buying power showed up. It is encouraging to see a reverse pattern show up on a upside after 3 weeks of selling. The best scenario is for the index to consolidate at this level and build a base to bring back investors' confidence. The up trend has been broken and the index is clearly in the down trend. Previous support levels become the resistance levels. Even the trend line (28 w MA) shows the lower high pattern, so we expect this down turn to last longer.

To put this correction in a longer term perspective, a monthly chart of S&P 500 index for more than 20 years is shown above. This up trend started in 2009 and is about six years old. The last time we have the similar trend is during 1995 - 2000 bull markets. That up trend ended up with a 2 year bear market and a 50% correction. Of course every market cycle is different, and industry sectors still rotate under different market and economic conditions. We just have to see how it all plays out.

Fund Rankings Update, 1/15/2016

Weekly chart of S&P 500 index

As discussed in the blog last week, S&P 500 index has fallen to the first support level of 1875. We expect to see some back and forth struggles between bulls and bears at this level. However, with the severe downward momentum and overwhelming selling pressure, we looks to be in a longer down trend.

Two more sell signals were issued in our model portfolios. All the model portfolios are either in cash positions or holding defensive funds.

Fund Rankings Update, 1/8/2016

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, and http://ycprankings.awardspace.us/RankingTables.htm.

Trading signal occurs in HSA model portfolio: Sell JLVIX, Buy Cash
Trading signal occurs in ETF model portfolio: Sell IGM, Buy IYR
Trading signal occurs in sETF model portfolio: Sell IGM, Buy ICF
Trading signal occurs in FEMKX model portfolio: Sell FEMKX, Buy Cash

Stocks fell sharply in the first trading week of 2016. Market turmoil in China spooked investors' confidence in its economy growth and pulled down other global markets. Oil prices fell below $35 support level and continue to fall. US stock markets tried to recover Friday morning on better than expected job report but failed miserably under overwhelming selling pressure. For the week S&P 500 index closed at 1922, down 5.96%, Dow Jones Industrial Average lost 6.19% while NASDAQ composite index decreased 7.26%.

Weekly chart of S&P 500 index

A long bodied red candle shows up in weekly chat of S&P 500 index due to the sell-off similar to that in August 2015. A support level around 1875 can be readily identified during that sell-off and that's where we think the index is heading to next week before a rebound can occur. S&P currently stands at 1922 about 10% below its peak of 2134. The next support level below 1875 is around 1820 which represents a normal 15% market correction.

The sever sell-off has turned the average momentum indicators into negative for quite a few top ranked funds in our ranking tables. Four trading signals were issued in HSA, ETF, sETF, and FEMKX model portfolios to move either to cash position or to defensive funds. Detail trading records can be found in the "Trading logs" page.

Fund Rankings Update, 12/31/2015

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, and http://ycprankings.awardspace.us/RankingTables.htm.

Stocks fell in the last trading week of 2015 and ended up lower for the year as well. Positive economy data on consumer confidence were offset by increase in weekly jobless claim. Investors just are not in the mood of holding stocks especially in the last two days of the year. For the week S&P 500 index closed at 20430, down 0.83%, Dow Jones Industrial Average lost 0.72% while NASDAQ composite index decreased 0.81%.

Weekly chart of S&P 500 index

Although S&P 500 index closed the week two points lower than its 28 week moving average, its weekly momentum indicator perked up a bit. This make us wonder if the "January effect" is around the corner. The January effect is a seasonal effect where investors sell their lost holdings at year end for tax purpose and buy them back in January at a lower price causing the rally in stock markets.

2015 has been another volatile year, S&P 500 index started the year with 2058 and reached the high of 2134 in May for a gain of 76 points. However, the index failed to march higher, and fell below its trend line in August after going flat for three months. S&P 500 index pluged to the low of 1867 due to concern about global economy slowdown, devaluation of China Renminbi and prospect of first rate hike by Federal Reserve. The index made its way back after staying two months below its tend line and has since struggled to keep itself above the support as the declining oil prices dragging its feet.

Looking forwards, we see slow growth in US economy with moderate rate hike as Fed tries to normalize the interest rate. Oil prices will continue to trend lower to $25, if it can not hold the current $34 support. Stock prices, still under a lot of pressure to digest their gain from the long rally in the past three years, will go side way with downward bias at best.