Market Direction Mid Week Update©

Market Direction: BULLISH alert issued 6/2/2016

The stock market ended the midweek affair on a flat note as investors responded to a fresh batch of quarterly earnings reports and a rally in crude oil futures. The Dow Jones Industrial Average (+0.2%) settled in-line with the S&P 500 (+0.2%) and slightly ahead of the Nasdaq Composite (+0.1%).

The broader market inched higher at the start of the session as better-than-expected quarterly results from members of the energy (+1.4%) and financial (+0.8%) sectors helped boost risk appetite in the broader market.

Equity indices extended their gains after the opening hour as investors assessed the latest inventory data from the Department of Energy. The EIA reported that crude oil stockpiles declined by 5.24 million barrels (consensus: +2.70 million) while gasoline stockpiles rose by 2.46 million barrels (consensus: -1.31 million). The energy component jumped on the news, settling higher by 2.6% ($51.59/bbl; +$1.30).

The benchmark index gained lockstep with crude oil, briefly clearing technical resistance near the 2144 price level. However, the S&P 500 moved lower in the final hour as participants eyed potentially market-moving events out of the US and Europe. On that note, the European Central Bank will hold its October policy meeting tomorrow morning.

Eight sectors ended in positive territory with energy (+1.4%), financials (+0.8%), materials (+0.7%), and consumer discretionary (+0.5%) leading the pack.

Treasuries finished on a flat note as yields finished little changed across the curve. The yield on the 2-yr note settled at 0.80% while the yield on the benchmark 10-yr note finished at 1.74%.

Today's trading volume fell below the average of 853 million as 798 million shares changed hands at the NYSE floor.

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The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (6/2/2016)
Dow	up 884.05 points a 4.95% gain	8/15/16
Nasdaq	up 371.52 points a 7.47% gain	9/22/16
S&P 500	up 88.55 points a 4.21% gain	8/15/16

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