The Weekly Average Momentum Index (AMI) rankings of HSA, SSPP, RSP, SELECT, ETF, iETF, and sETF have been posted on the "Rankings" and "Trading Logs" pages.
Trading signal occurs in the FEMKX timing model: Sell FEMKX, Buy Cash
Stock markets faced their sharpest reality check in months this week, as a massive Friday sell-off in mega-cap technology companies dragged down the broader averages. The S&P 500 slumped 2.6% on Friday alone, marking its worst single-day performance since last October. The slump was due to the strong Job reports from the Labor Department on Friday morning that the economy added 172,000 jobs in May, nearly doubling economists' consensus expectations. While the unemployment rate held steady at 4.3%, the strong job creation and positive revisions to prior months sent Treasury yields surging. The 10-year Treasury yield climbed sharply to 4.54%, as market participants rapidly priced in the likelihood that the Federal Reserve will hold interest rates higher for longer, or potentially even consider a rate hike later this year. For the week, the S&P 500 fell 2.6% to close at 7,383, the Dow Jones Industrial Average slipped 1.3%, and the tech-heavy Nasdaq Composite bore the brunt of the damage, plunging 4.2% to close at 25,709.
The S&P 500 underwent a major technical rejection at 7600 level, failing to sustain its position in "blue sky" territory and plummeting back below the 7,500 psychological barrier. By closing at 7,383, the index has wiped out its late-May gains and is now aggressively testing its short-term moving averages. The vertical nature of Friday's drop suggests that momentum has shifted to neutral-bearish in the immediate term, though the structural long-term trend remains intact. The 7500 flips from support to short-term technical resistance now that it has been broken, while 7200, the previous breakout point, becomes short-term support with the previous high of 7000, which also coincides with the 28-week EMA as a further downside support.
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| The weekly chart of the S&P 500 index |