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 FEMKX timing system: Sell FEMKX, Buy Cash.
Trading signal occurs in ETF model portfolio: Sell IBB, Buy IDU.
Stocks declined sharply again after Federal Reserve raised the interest rate another 0.75% on Wednesday, brining the FED fund rate to 3.0% - 3.25%. This is the third 0.75% rate hike and fear of recession due to FED's hawkish interest rate policy weighed on investors' sentiment. For the week, S&P 500 index went down 4.65% to 3693, Dow Jones Industrial Average lost 4.0%, and the technology laden NASDAQ composite index decreased 5.07%.
S&P 500 index reached the 3600 supporting level after declining sharply for two weeks. Even though the index still closed above the previous low of 3636, a rebound next week does not look to be likely with its deteriorating momentum. Support on the downside are 3200 and 3000 if the index can not hold the 3600 support. As this bearish trend was induced by interest rate hikes, we expect the reversal will only come when the FED slows the pace of the hikes or reaches its targeted rate range of 4.0% - 4.5%.
With the current extreme bearish sentiment, three trading signals were issued in our model portfolios this week. HSA, FEMKX and ETF model portfolios will sell their current holdings and move either to cash or defensive utility index fund.
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| Weekly chart of S&P 500 index |
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