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 HSA model portfolio: Sell VFIAX, Buy PCRIX
Trading signal occurs in ETF model portfolio: Sell IGN, Buy IYE
Trading signal occurs in iETF model portfolio: Sell IOO, Buy EZA
Trading signal occurs in RSP model portfolio: Sell FCNTX, Buy 05087
Stocks headed lower as higher than expected annual inflation of 7.5% triggered the fear of more aggressive interest rate hikes from the FED, and plunged the stocks lower at the end of the week. Imminent treat of Russian invasion to Ukraine also contributed to the sell-off on Friday. For the week, S&P 500 index went down 1.82% to 4418, Dow Jones Industrial Average lost 1.0%, and the technology laden NASDAQ composite index decreased 2.18%.
S&P 500 index struggled to break above its 28 week EMA midweek and closed below its trend line for the fourth week. As shown in the weekly chart below, the index has reached the high of 4600 in the last two weeks but ended up below the EMA each time. With the declining momentum, we expect the index to continue staying below its trend line and likely to retest its recent low of 4200. Our market outlook remains the same as last week that this pullback likely will last a few more weeks into March.
Four trading signals were issued this week due to heavy sector rotation. All of our model portfolio holdings have now been moved to either defensive or anti-inflation type of funds. Looking back at the trading logs, the first bearish signal for this market pullback was issued in FEMKX timing system on 11/29 last year. At that time, the S&P 500 index is still above its 28 week EMA, but the FEMKX, which tracks the small cap index closely, has turned bearish and gave an early signal to take up defensive position. The 21 month long bull run (April, 2020 - Jan, 2022) has come to an end and it remains to be seen if this pullback will turn into a prolong bearish decline.
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| Weekly chart of S&P 500 index |
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