YCP ETF and Mutual Fund Rankings: January 2021

Fund Rankings Update, 1/29/2021

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.

Trading signal occurs in ETF model portfolio: Sell ILF Buy IJS

Stocks fell sharply with high volatility and high volume. Dow Jones Industrial Average endured daily plunge of 600 points on Wednesday and Friday. The heightened volatility was attributed to the quarterly earning reports as well as the "short squeeze" for stocks like, Gamestop and AMC entertainment. Economic news about Fed's keeping the interest rate intact out of uncertainty of the economic growth and the 4% US 4th quarter GDP growth which was inline with expectation were largely brushed away as attention was focused on the wild swing of those short squeezed stocks. For the week, S&P 500 index went down 3.31% to 3714, Dow Jones Industrial Average lost 3.27%, and the technology laden NASDAQ composite index decreased 3.49%.

With the increased volatility, S&P 500 index has fallen below its tight advancing trading channel. Looking back at the price pattern prior and after start of 2020, one can easily draw the conclusion that a sharp correction is waiting ahead if the volatility continues for another few weeks. A first support below the current price is at 3500 which is also close to the 28 week moving average and the next level down is at 3200 which is about 8% below the high of 3870 it has reached this week. We shall see how this play out in the next couple of weeks.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/22/2021

Stocks advanced to new high mid week on the hope of a larger stimulus package from the new Biden administration. Netflix's surprising strong quarterly earnings also boosted big tech's stock prices. Communication sectors outperformed the market while energy related sectors underperformed due to increase in US's oil inventories. On the economy front, the weekly jobless claim fell down a bit but still at a high level around 900,000, while the January manufacturing activities surprised economist on the upside. For the week, S&P 500 index went up 1.94% to 3841, Dow Jones Industrial Average gained 0.59%, and the technology laden NASDAQ composite index increased 4.19%.

S&P 500 continued its upward advance within the tight trading channel that we mentioned last week. The index is well above its 28 week moving average with strong momentum. The march will continue until the index falls below the tight trading channel.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/15/2021

Political tension weighed on investors' sentiment this week while incoming President Biden unveiled his ambitious 1.9 Trillion stimulus package for Codv-19 relief. Retail sales fell 0.7% in December, more than expected, and the jobless claims jumped to 965K, the highest since August. Earning season also started on Friday with banking sector reported Q4 earnings first. Consensus estimates see the quarterly earnings of S&P 500 companies to decline 6.8% on a year to year basis. For the week, S&P 500 index went down 1.48% to 3768, Dow Jones Industrial Average lost 0.91%, and the technology laden NASDAQ composite index decreased 1.54%.

S&P 500 fell back below 3800 and tested the short term support at 3750. As long as the 3750 support holds, the index has a good change to break 3800 and heads toward 3900 in the near term. If the index fails to stay above 3750, the next support level is 3600 - 3650. The index has been trending up in a tight trading channel since November as seen in the weekly chart below. The chart pattern is very similar to what had happened in the late 2019. S&P 500 index was in a tight trading range for three months from October 2019 to the end of 2019. The index started to experience higher volatility in January 2020 and plunged in late February. Our cautious outlook of the market stays the same. While we see the index goes higher in the short term because of its high momentum and strong short term supports, the risk levels increase as the index marching higher.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/8/2021

Major indices continued their upward advance, reaching another all time high this week. Investors look past the civil unrest encouraged by the outgoing president Trump and anticipate the next round of fiscal stimulus and the spending plan on infrastructure, new energies, and health care under incoming President Biden and Democrat controlled House and Senate. Small caps and value stocks outperformed large caps and growth stocks. For the week, S&P 500 index went up 1.83% to 3824, Dow Jones Industrial Average gained 1.61% , and the technology laden NASDAQ composite index increased 2.43%.

After breaking the resistance at 3700, S&P 500 quickly advanced above 3800 without hesitation. The index is 10.1% above its 28 week EMA. With the extreme high momentum, the index will climb higher as we have predicted but the risk level is getting higher and higher. It is prudent to review and balance the portfolio allocation to reduce the risk exposure.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/1/2021

Happy New Year! Major indices reached all time high in this holiday shorten week to close the year 2020. Investors' sentiment were boosted by President Trump's signing of stimulus bill after reluctance for a few days. The surprised decline in weekly jobless claim also helped the market advance further. Health care sectors outperformed the market while big tech companies, which were strong the previous week, lost its momentum. For the week, S&P 500 index went up 1.43% to 3756, Dow Jones Industrial Average gained 1.35% , and the technology laden NASDAQ composite index increased 0.65%.

S&P 500 broke and solidly closed above 3700 after four weeks of tight range consolidation. The index is 9% above its 28 week EMA. It seems that the index is heading toward 3800 or even 3900 in the short term before its inevitable correction.

Weekly chart of S&P 500 index