Trading signal occurs in FEMKX timing system: Sell FEMKX, Buy Cash
Stocks slowed its slide this week as trade friction with China dominated the news. Major indices plunged on Monday as China devalued its currency. Investors were afraid that the trade war may expand to a currency war. Stocks recovered mid-week but fell back on Friday as President Trump told reporter that he is not prepare to make deal with China. For the week, S&P 500 index closed at 2918 down 0.46%, Dow Jones Industrial Average lost 0.75% and technology laden NASDAQ composite index decreased 0.56%.
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| Weekly chart of S&P 500 index |
S&P 500 index opened with a gap down and went down to 2822, less than 1% above the 2800 support level we talked about last week, at the beginning of the week. The index rebounded strongly mid-week but failed to break the resistance at 2940 level and closed the week at 2918, still lower than the close of the previous week. The price action showed the strong support at 2800, the resistance at 2940 and the indecision of the market after sharp sell-off the previous week. Falling below 2800, the index will test the next support at 2600, while breaking above 2940, the index is expect to reach record high. We think the index will trade between 2800 and 2940 next week or two before it chooses a direction to go.
Notice that our FEMKX timing system has turn negative with a sell signal issued this week. With the sell signal from FEMKX, we will use more caution and trade defensively in managing our portfolio.
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| Weekly chart of FEMKX |
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