YCP ETF and Mutual Fund Rankings: January 2022

Fund Rankings Update, 1/28/2022

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 FSELX, Buy FSENX

All major indices recovered a bit from large losses the previous week as the volatility hit the highest level since the pandemic. Fear of rate hike and high inflation still dominated investors' sentiment. For the week, S&P 500 index went up 0.77% to 4431, Dow Jones Industrial Average gained 1.34%, and the technology laden NASDAQ composite index increased 0.01%.

S&P 500 fell to 4200 support level mid week and rebounded at the end of the week to form a hammer candle pattern. If the index can hold the 4200 support for a couple of weeks and climb back above 28 week moving average, we may see the end of the correction. This pull back will last a few more weeks as S&P 500 index still closed below its 28 week EMA despite the rebound and its momentum indicator STO[15,1] fell below 50 and continued heading downward.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/21/2022

All major indices suffered the largest declines since the pandemic low in March, 2020 as fear of rising interest rates and slower economic growth prevailed. For the week, S&P 500 index went down 5.68% to 4397, Dow Jones Industrial Average lost 4.58%, and the technology laden NASDAQ composite index decreased 7.55%.

S&P 500 index finally yielded to the pulling from the tech heavied Nasdaq composite index and fell below its 28 week exponential moving average as seen in the weekly chart below. The momentum indicator, STO [15, 1] of the index has declined fast and headed below 50. For key support levels on the downside, we are currently at 4400 weak support level while a stronger support at 4200 awaits below. S&P 500 index has climbed from the low of 2191 in March 2020 to the high of 4818 in December 2021 with a gain of warping 120% in less than 24 months,. A 38% Fibonacci retracement of the rally will take us down to 3800. As the correction is mostly induced by fear of rate hikes, we expect the consolidation/correction to continue before Fed's rate hike announcement in March.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/14/2022

All major indices continued its slide as rising inflation and looming interest hikes weighed on investors' sentiment. Financial and banking sectors were under pressure as JPMorgan Chase and Citigroup reported lower fourth quarter profit while energy sectors outperformed due to oil prices increase. For the week, S&P 500 index went down 0.3% to 4662, Dow Jones Industrial Average lost 0.88%, and the technology laden NASDAQ composite index decreased 0.28%.

S&P 500 index continued its horizontal consolidation as shown in the weekly chart below while Nasdaq composite index undergoes correction. In the chart below, one can see that Nasdaq composite index has fallen and closed below its 28 week moving average with its stochastic momentum indicator falling below 50. We can see that in the last 18 months, the STO[15,1] indicator of Nasdaq composite has fallen close or dipped slightly below 50 three times, but each time the index has managed to stay above and rebounded back above its 28 week EMA. We think that the index will experience some more correction in the next few weeks as it closed bearishly below the trendline. However, it remain to be seen that if it will pull down the S&P 500 index with it.

Weekly chart of S&P 500 index

Weekly chart of Nasdaq composite index

Fund Rankings Update, 1/7/2022

Trading signal occurs in HSA model portfolio: Sell MLAIX, Buy VFIAX

Trading signal occurs in ETF model portfolio: Sell IYW, Buy IGN

Stocks started the firs week of the year with a loss. Interest rate sensitive technology sectors endured the hardest hit by the release Fed's December meeting minutes on Wednesday, which revealed Fed's hawkish stance in making more aggressive and faster rate hikes this year and the discussion of reducing its balance sheet further tightening the monetary policy. For the week, S&P 500 index went down 1.87% to 4677, Dow Jones Industrial Average lost 0.29%, and the technology laden NASDAQ composite index decreased 4.53%.

S&P 500 index continued its horizontal consolidation as shown in the weekly chart below for the ninth week since beginning of November 2021. While S&P 500 index goes side way, the internal sectors are experiencing heavy rotation due to expectation of high inflation and interest hikes. Investors have been rotating out of the last year's high flying tech sectors and moved into energy and finance sectors. We may see more consolidation coming our way when the first rate hike realizes. At that time, we will evaluate the price action and see which direction the index want to take us.

Weekly chart of S&P 500 index

Fund Rankings Update, 12/31/2021

Trading signal occurs in SSPP model portfolio: Sell FDGRX, Buy FRESX

Trading signal occurs in sETF model portfolio: Sell IEO, Buy ITB

Happy New Year!! Stocks went up this week with S&P 500 index closed the year at record high. Investors' sentiment was largely dominated by the influence of Covid Omicron variant as evidence, albeit limited, showed that it has milder effect than the Delta variant. On the economic front, weekly jobless claims fell to decade low, and holiday sales in December wen up 10 % more than the pre-pandemic level in 2019. For the week, S&P 500 index went up 0.85% to 47665, Dow Jones Industrial Average gained 1.08%, while the technology laden NASDAQ composite index decreased 0.05%.

Our technical outlook stays the same for another week as S&P 500 index continued its horizontal consolidation as shown in the weekly chart below. On the positive side, the index is marching above its 28 week EMA with high momentum. On the cautious side, the price and momentum indicator look to be forming a divergent pattern where price is makin higher high and the momentum indicator is making a lower high.

Two trading signals occurred in our model portfolios this week due to momentum ranking changes. In the SSPP model portfolio, the growth oriented fund, FDGRX, is being replaced with conservative real estate fund, FRESX, and the recently high flying energy fund, IEO is replaced with home construction fund, ITB, in the sETF model portfolio.

Weekly chart of S&P 500 index