Fund Rankings Update, 2/2/2018

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 sETF model portfolio: Sell ITB, Buy IAI

Concern about rising interest rate and profit taking handed stocks the biggest weekly drop since January 2016.  Volatility spiked at multi-month high. On Friday, Dow Jones Industrial Average plunged more than 600 points. For the week, S&P 500 index closed at 27622, down 3.85%, Dow Jones Industrial Average lost 4.12% and technology laden NASDAQ composite index decreased 3.53%.

Weekly Chart of S&P 500 index

As observed in the weekly chart, S&P 500 still stay above its 28-week trend line with strong momentum.  The index has gained more than 50 % in the past 2 two years with only minor consolidation back to trend line. The index was progressing in a more sustainable uptrend before it went parabolic in mid November.  With the sound economy backdrop, we do not view this as onset of direction change but a getting back to a more normal growth path.  Several round number levels with various strength are waiting to support the index from below, and 2600 looks to be a likely candidate. 

A trading signal occurs in sETF model portfolio this week. Concern about rising interest rate pushes down the Home construction index fund (ITB) out the top seven ranked funds while boosted financial related index fund (IAI) to the number one ranked fund in the sETF momentum ranking table.  We have held ITB for only two months with a loss of 0.9%. We will buy into IAI and see how it performs.