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.
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.
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| Weekly chart of S&P 500 index |
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