Fund Rankings Update, 4/6/2018

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.

Fear of trade war with China started to materialized as US and China traded shots at raising tariffs to each other. Stocks eventually yielded to the rising trade tension and plunged more than 570 points on Friday.  For the week, S&P 500 index closed at 2604, down 1.38%, Dow Jones Industrial Average lost 0.71% and technology laden NASDAQ composite index decreased 2.1%.

Weekly chart of S&P 500 index

The STO momentum index of S&P 500 index has been falling for 10 weeks and is reaching the over sold region (below 20). The index has closed below its 28 week moving average for 3 weeks and having trouble to break above the resistance in the past two weeks. The index went up parabolically last November which was not sustainable and we are paying the price right now. The economy and company earnings are still growing which provides the support to prevent this become a more severe down trend. The volatility has subsided a bit even though the index has failed to break above its moving average in the past two weeks. We think  STO momentum index of S&P 500 will fall below the threshold of 20 and enter over sold region, stay there for a few weeks before accumulating enough momentum to climb above 20 again creating a buying opportunity. We will monitor closely the behavior of the index below its 28 week moving average, which will tell us more about the underlying market strength.