YCP ETF and Mutual Fund Rankings: September 2020

Fund Rankings Update, 9/25/2020

Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, sETF have been posted in "Rankings", "Trading Logs" pages, as well as in http://ycprankings.awardspace.us/RankingTables.htm.

Worries about the resurgent of coronavirus case in Europe and diminished hope for the second round of economy stimulus package from congress weighed in on investor sentiment this past week. Major indices ended the week mixed, with technology and consumer discretion sectors outperforming and energy sectors lagging the markets. For the week, S&P 500 index went down 0.63% to 3298, Dow Jones Industrial Average lost 1.75% , while the technology laden NASDAQ composite index increased 1.11%.

As observed in the weekly chart below, S&P 500 index fell to the low of 3209 mid week, 9 point above the 3200 support level we talked about in the blog post last week. The index rebounded and closed the week at 3298 forming a hammer candle stick pattern. With this price action, we have more confidence that the index will consolidate around 3200 level and continue its ascending trend. As this is the first test to the support level, we expect the index to test the support again in the coming weeks to complete the consolidation.

Weekly chart of S&P 500 index

Fund Rankings Update, 9/18/2020

Trading signal occurs in ETF model portfolio: Sell IGV, Buy IYT.

Positive news about availability of COVID-19 vaccine was offset by worries about the effectiveness of the Fed's easy money policy to drive the economy recovery. For the week, S&P 500 index went down 0.64% to 3319, Dow Jones Industrial Average lost 0.03% , and the technology laden NASDAQ composite index decreased 0.56%.

S&P 500 index closed the week 0.64% lower and reaching the weekly low of 3292, which is the first support level we mentioned last week. The next level down will be a stronger support at 3200 level which corresponds to the 61.8% Fibonacci retracement level and the 28 week EMA trendline support. We think the index will rebound from 3200 level when it meets the 28 week EMA. As observed from the weekly chart below, up-trend corrections usually bounced off the trendline with STO indicator around 50 (red circles) to resume their advancement. The up trend is still intact as long as the index stays above its trendline. We will monitor closely how the index react around these support levels to provide clear market direction.

A trading signal was issued in the ETF model portfolio due to the recent slump in tech shares. The momentum rank of software sector fund, IGV, fell below 7 and is replaced with the current number one fund, IYT, in the ETF ranking table.

Weekly chart of S&P 500 index

Fund Rankings Update, 9/11/2020

Stocks continued its pulled back, tech sectors leading the way down in this holiday shortened trading week. US economy data were mixed last week with US initial jobless claim remained unchanged from the previous week at 88,4000 while the NFIB Small Business Optimism Index rose unexpectedly in August. For the week, S&P 500 index went down 2.51% to 3340, Dow Jones Industrial Average lost 1.66% , and the technology laden NASDAQ composite index decreased 4.06%.

S&P 500 index continued its pull back and heading toward its first support level at 3275-3290. Its weekly momentum indicator STO (15,1) has fallen below the overbought threshold of 80. After 3275 level, the next support will be the critical 2940-3000 level. The index has fallen from 11.8% above its 28 week EMA two weeks ago to 5.3% above its 28 week EMA. It is still high above its trend line but in a more reasonable level. The index will keep the bull trend alive if it can rebound from the 3275-3290 level, and we will see how the index behave around that level next week.

Weekly Chart of S&P 500 Index

Fund Rankings Update, 9/4/2020

US economy added 1.4 million jobs in August, in line with Street's expectation. However, investors were concerned about the high valuation of stocks after recent run-up and started to re-balance their portfolio. As a results, stocks fell 3% Thursday and another 1% Friday with large tech companies leading the way down. For the week, S&P 500 index went down 2.31% to 3426, Dow Jones Industrial Average lost 1.82% , and the technology laden NASDAQ composite index decreased 3.27%.

After 5 weeks of nonstop advancement, S&P 500 index reached all time high of 3588 and turned negative to the low of 3349. The index finally took a breather and ended up at 3426, but still stays 8.5% above its 28 week EMA. As volatility returns and the index is still far above its trend line, we maintain our cautious outlook for the short term market direction.

Weekly chart of S&P 500 index