YCP ETF and Mutual Fund Rankings

Fund Rankings Update, 3/12/2021

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 RSP model portfolio: Sell FDGRX, Buy ARGFX

Stocks advanced broadly higher this week as treasury bond yields retreating and pricing data showing inflation is under control. Investors' sentiment were also boosted by lower than expected weekly jobless claim and the 1.9 Trillion Codv-19 relief package being singed into law by President Biden. On the sector front, consumer discretionary and real estate stocks outperformed the general markets, and small caps extended their leadership over the large caps. For the week, S&P 500 index went up 2.64% to 3943, Dow Jones Industrial Average gained 4.07%, and the technology laden NASDAQ composite index increased 3.09%.

Last week, S&P 500 index closed the week with an indecision candle formation. This week, the index advanced higher closing near the record high of 3950. The behavior of the index next week is very important in determining its intermediate term direction. If the S&P 500 index breaks and closes above the 3950 resistance next week, we will see a push toward 4000 and above. If the index failed to break and close above 3950, we see a bearish double top chart formation and a more severe correction down to 3500 ahead.

After FEMKX timing system issuing a trading signal to move to cash position last week, the RSP model portfolio has signaled a position shift this week: Sell FDGRX, and buy ARGFX due to momentum ranking changes. Small cap stocks have been strong since the beginning of 2021. With the recent correction in tech sectors and growth stocks, the momentum ranking of FDGRX has fallen below the threshold and is replaced with the current number one ranked and small cap oriented fund, ARGFX. We have held FDGRX for 280 days with a gain of 47.6%.

Weekly chart of S&P 500 index

Fund Rankings Update, 3/5/2021

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

Trading signal occurs in FEMKX timing system: Sell FEMKX, Buy CASH

Major indices ended the week mixed with lingering worries from investors about the rising Treasury yields. Value stocks outperformed the growth stocks and energy stocks led the sectors with higher energy prices. Interest rate sensitive tech stocks were were particular weak for a second week. For the week, S&P 500 index went up 0.81% to 3841, Dow Jones Industrial Average gained 1.82%, while the technology laden NASDAQ composite index decreased 2.06%.

S&P 500 index closed this week with an indecision Doji candle stick pattern on the weekly chart. The index opened the week strong on Monday, went up above 3900 but sold off soon for the next three days, reached the low of 3723, climbed back above its 50 day moving average and closed the week at about where it began. This correction has hit harder on technology sectors than the general markets. As one can see in the weekly chart of NASDAQ composite index, the $COMPQ has reached its 28 week moving average at 12920 which is 9.1% below its high of 14125, while the S&P 500 index has not reached it 28 week EMA yet, and has only corrected 5.7% at the low of 3723. We are third week into the correction. If the past pattern is of any indication, the end of correction may end in a week or two.

Two trading signals were issued in the model portfolios due the recent market correction. In SSPP model portfolio, the position has been moved from Growth Company fund, FDGRX to a more defensive Valued fund, FDVLX, and the FEMKX timing system has issued a trading signal to move to cash position due to the its trading rule. FEMKX timing system has been a very reliable indicator for the general market direction. The signal has also validated our cautious stance on the market since the end of 2020. Once on the sideline, the next thing is to wait patiently for the the market to consolidate and reenter at the proper time.

Weekly chart of NASDAQ Composite Index

Weekly chart of S&P 500 index

Fund Rankings Update, 2/26/2021

Trading signal occurs in SELECT model portfolio: Sell FSAVX, Buy FSESX

Stocks suffered a large set back in a month due to sharp rise of long term treasury yields. Investors feared that economic growth due to the reopening of the economy and the stimulus package from Biden administration will be overheated causing high inflation and force the Fed to change its dovish interest rate policy. Major indices plunged sharply lower with Dow Joes Industrial Average dropping more than 1000 points in two days. Interest rate sensitive tech stocks were hit hard especially, while energy stocks, cyclical and value stocks outperformed the market. For the week, S&P 500 index went down 2.45% to 3811, Dow Jones Industrial Average lost 1.78%, and the technology laden NASDAQ composite index decreased 4.92%.

Will history repeats itself? The weekly chart pattern of S&P 500 index for the past two months is very similar to the chart pattern for the first two months in 2020. Stock market crashed after S&P 500 index reaching the record high of 3393 in mid-February, 2020 due to Codv pandemics. The index fell this week after reaching the record high of 3950 the previous week. As there is no major market disruptive event, we don't see an imminent market crash but a correction coming. The index always comes back to its moving average and sometimes the panic selling may cause it to overshoot on the downside. The 28 week EMA is at around 3600, which is 9% below its high of 3950, and a stronger support at 3500 gives a healthier correction of 13%. It will be interesting to find out where the market takes us next week.

Weekly chart of S&P 500 index

Fund Rankings Update, 2/19/2021

Stocks continued to march higher with less volatility as optimism arise from wider vaccine availability and declining Codv-19 cases. Federal Reserve Chair Jerome Powell also eased investors' concern by reiterating Fed's commitment to the low interest policy on Wednesday. On the sector front, communication and energy stocks outperformed while consumer discretion stocks lagged behind. For the week, S&P 500 index went up 1.23% to 3934, Dow Jones Industrial Average gained 1.0%, and the technology laden NASDAQ composite index increased 1.73%.

After two weeks of higher volatility trading, S&P 500 index advanced above 3900 to a new high with a narrower range. The index is not fart away from 4000 and could reach the level in a couple of weeks barring major disrupted events which we can't see any on the horizon. The one concern most analysts have is the high valuation of the stocks, and the chart has been telling us that the index is in an extreme over bought condition for a while. We have been on the caution side since end of last year, reducing market exposure as the index goes higher but not out of market for risk management. Our view of the market direction has not been changed but we will continue to monitor the market development and adjust our market assessment accordingly.

Fund Rankings Update, 2/12/2021

Expectation of further fiscal stimulus policy and progress on Codv-19 vaccination pushed stocks higher at the beginning of the week. However, higher than expected weekly jobless claims and inflation worries due to unexpected stronger retail sales pulled the markets into negative territories later of the weeks. For the week, S&P 500 index went down 0.71% to 3906, Dow Jones Industrial Average gained 0.11%, and the technology laden NASDAQ composite index decreased 1.57%.

S&P 500 index went back to the tight upward trading channel in the past two weeks. With the high upward momentum, the index is very likely to reach 4000 level in the next few weeks as we have discussed in the blog last week. We think that the index will continue to grind higher in the short term but the downside risk remains at an extremely high level. Caution and risk management are warranted as the index marching higher.

Weekly chart of S&P 500 index

Fund Rankings Update, 2/5/2021

Stocks rebounded on the optimism for stimulus package, increasing vaccination for the public and declining Codv-19 cases. The short squeeze phenomenon for a handful of targeted stocks, like Gamestop and AMC, also subsided allowing investors to turn their attention back to "traditional stocks". On the sector front, energy stocks outperformed while healthcare lagged behind. For the week, S&P 500 index went up 4.25% to 3886, Dow Jones Industrial Average gained 3.89%, and the technology laden NASDAQ composite index increased 6.01%.

Price volatility of S&P 500 index increased for the second week as the index approaching 3900. While the index reaching the new high, its momentum indicator STO[15, 1] fell lower as shown in the weekly chart below. The weekly price pattern of the index looks very similar to the pattern in early 2020 before the sharp plunge in mid February. Although we don't expect a market crash this time around, the high valuation coupled with waning momentum do give us a reason for concern.

Weekly chart of S&P 500 index

Fund Rankings Update, 1/29/2021

Trading signal occurs in ETF model portfolio: Sell ILF Buy IJS

Stocks fell sharply with high volatility and high volume. Dow Jones Industrial Average endured daily plunge of 600 points on Wednesday and Friday. The heightened volatility was attributed to the quarterly earning reports as well as the "short squeeze" for stocks like, Gamestop and AMC entertainment. Economic news about Fed's keeping the interest rate intact out of uncertainty of the economic growth and the 4% US 4th quarter GDP growth which was inline with expectation were largely brushed away as attention was focused on the wild swing of those short squeezed stocks. For the week, S&P 500 index went down 3.31% to 3714, Dow Jones Industrial Average lost 3.27%, and the technology laden NASDAQ composite index decreased 3.49%.

With the increased volatility, S&P 500 index has fallen below its tight advancing trading channel. Looking back at the price pattern prior and after start of 2020, one can easily draw the conclusion that a sharp correction is waiting ahead if the volatility continues for another few weeks. A first support below the current price is at 3500 which is also close to the 28 week moving average and the next level down is at 3200 which is about 8% below the high of 3870 it has reached this week. We shall see how this play out in the next couple of weeks.

Weekly chart of S&P 500 index