Stocks continued it winning streak boosted by solid retail sales growth in December. Initial earning reports from financial institutes also provided confidence to investors. For the week, S&P 500 index closed at 2786, up 1.57%, Dow Jones Industrial Average gained 2.01% and technology laden NASDAQ composite index increased 1.74%.
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| Weekly chart of S&P 500 index |
The technical strength of S&P 500 index remains the same as last week. The index is riding high with great momentum and increased upward speed. The index (and stock markets) is moving higher in a parabolic fashion and that usually ends up in collapse. We have been turning cautious for a while but still stay in the markets according to our systems. As we've discussed last week, when the inevitable comes, make sure to stick to your trading plan.
Trading signal occurs in ETF model portfolio this week. The momentum rank of IGM (technology index fund), even it is still moving higher, is pushed out of the ranking threshold by other index funds. We have held IGM for 32 days with a gain of 5.7%. IGM is replaced with South Africa Index Fund, EZA.
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