Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, and sETF have been posted on "Rankings", and "Trading Logs" pages, as well as in http://ycprankings.awardspace.us/RankingTables.htm.
Trading signal occurs in iETF model portfolio: Sell EWN, Buy EWT
Investors continued to take monies out of tech stocks and rotate them into value and small-cap stocks for the second week. Core (less food and energy) personal consumption expenditures (PCE) price index released by the Commerce Department rose 0.2% in June and 2.6% year over year, which enforced economists' expectation for a rate cut in September from the FED. Other economic data released during the week showed a mixed picture of the economic growth: Home sales were down more than expected as well as S&P's Manufacturing Purchasing Managers' Index (flash PMI). However, the Commerce Department reported that durable goods orders went up in June and consumer spending rose at an annualized pace of 2.3% in the second quarter, more than expected. For the week, the S&P 500 went down 0.83%, closing at 5459. The Dow Jones Industrial Average gained 0.75%, and the Nasdaq composite index plunged 2.08%.
The S&P 500 index bounced to 5459 this week after testing the psychological support at 5400. Despite the rebound, weakening momentum suggests the index is heading towards another hurdle: the 28-week exponential moving average around 5460, which also coincides with its previous peak. As we discussed last week, the market’s behavior at this key level could present a potential buying opportunity for the second half of the year.
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| The weekly chart of the S&P 500 index |
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