Trading signal occurs in FEMKX timing model: Sell Cash, Buy FEMKX
Stocks climbed sharply higher with S&P 500 index reached record high during the week. The strong rally was powered by Fed's statement after its policy meeting on Wednesday showing its willingness to cut rate if necessary to keep the economy expansion going. Geopolitical tension in middle east and news that Iran shooting down US military drone also pushed the oil prices and energy stocks higher. For the week, S&P 500 index closed at 2950 up 2.2%, Dow Jones Industrial Average gained 2.41% and technology laden NASDAQ composite index increased 3.01% for the week.
As displayed in the weekly chart, S&P 500 index reached a record of 2964 in mid-week and closed back down a bit at the the resistance level of 2950. This is the third time S&P 500 reached 2950 resistance level. The index did not fare well in the previous two times bumping against this resistance. The first time in Sept-Oct 2018, the index plunged 20 percent with a duration of 12 weeks, and the second time in April 2019, the index fell 8 percent for a duration of 5 weeks. Next couple of weeks will be critical in determining the direction of the stock markets. The up trend will continue if S&P 500 index can close solidly above 2950 making a higher high on the weekly chart. If the index fails again at this resistance level, we will see a prolong bear market in the very near future.
Notably, a trading signal occurs in FEMKX timing model this week as stocks have been strong for the past four weeks. The momentum indicator STO[15,1] of FEMKX has climbed back above 50 this week and a buy signal was issued. The FEMKX timing model has consistently predict the intermediate term market direction in the past. It will be interesting to see how it performs this time.
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| Weekly chart of S&P 500 index |
As displayed in the weekly chart, S&P 500 index reached a record of 2964 in mid-week and closed back down a bit at the the resistance level of 2950. This is the third time S&P 500 reached 2950 resistance level. The index did not fare well in the previous two times bumping against this resistance. The first time in Sept-Oct 2018, the index plunged 20 percent with a duration of 12 weeks, and the second time in April 2019, the index fell 8 percent for a duration of 5 weeks. Next couple of weeks will be critical in determining the direction of the stock markets. The up trend will continue if S&P 500 index can close solidly above 2950 making a higher high on the weekly chart. If the index fails again at this resistance level, we will see a prolong bear market in the very near future.
Notably, a trading signal occurs in FEMKX timing model this week as stocks have been strong for the past four weeks. The momentum indicator STO[15,1] of FEMKX has climbed back above 50 this week and a buy signal was issued. The FEMKX timing model has consistently predict the intermediate term market direction in the past. It will be interesting to see how it performs this time.
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