Trading signal occurs in RSP model portfolio: Sell 42626, Buy FLPSX
News that US and China have reached a phase one trade deal even though without much detail, keep the stock markets afloat for another week. However, November retail sales went down 0.1% and worst than expected Jobless report kept the markets in check. For the week, S&P 500 index closed at 3168 up 0.73%, and Dow Jones Industrial Average and technology laden NASDAQ composite index gained 0.43% and 0.91% respectively.
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| Weekly chart of S&P 500 index |
S&P 500 index continue to pull away from its 28 week moving average ant stands at 5.5% above the trend line. The index still possess extreme high momentum and may carry it higher till the end of the year. As the index advances higher and moves further away from its trend line, more caution is needed. History has taught us that pull back is usually much more intense and severe than moving-up as indicated by the long red candles on the chart above.
Two trading signals occurs in the model portfolios due to momentum ranking changes. With the recent surge in Bio-tech and small cap stocks, holdings in sETF and RSP model portfolios will be replaced with IBB and FLPSX.
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