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 SELECT model portfolio: Sell FSAVX, Buy FSESX
Stocks suffered a large set back in a month due to sharp rise of long term treasury yields. Investors feared that economic growth due to the reopening of the economy and the stimulus package from Biden administration will be overheated causing high inflation and force the Fed to change its dovish interest rate policy. Major indices plunged sharply lower with Dow Joes Industrial Average dropping more than 1000 points in two days. Interest rate sensitive tech stocks were hit hard especially, while energy stocks, cyclical and value stocks outperformed the market. For the week, S&P 500 index went down 2.45% to 3811, Dow Jones Industrial Average lost 1.78%, and the technology laden NASDAQ composite index decreased 4.92%.
Will history repeats itself? The weekly chart pattern of S&P 500 index for the past two months is very similar to the chart pattern for the first two months in 2020. Stock market crashed after S&P 500 index reaching the record high of 3393 in mid-February, 2020 due to Codv pandemics. The index fell this week after reaching the record high of 3950 the previous week. As there is no major market disruptive event, we don't see an imminent market crash but a correction coming. The index always comes back to its moving average and sometimes the panic selling may cause it to overshoot on the downside. The 28 week EMA is at around 3600, which is 9% below its high of 3950, and a stronger support at 3500 gives a healthier correction of 13%. It will be interesting to find out where the market takes us next week.
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| Weekly chart of S&P 500 index |
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