Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 6/2/2016

The economy

The stock market is still under pressure, consider taking profits.

Equity indices rallied at the start of the session as positive inflation data out of China, a string of better-than-expected expected quarterly reports, and upbeat domestic data boosted investor sentiment.

The three catalysts also helped solidify the rate hike picture as above-consensus inflation data stood in contrast to persistently low inflation readings. The Producer Price Index (PPI) came in slightly ahead of estimates as PPI rose 0.3% in September (Briefing.com consensus +0.2%). Meanwhile, core PPI ticked higher by 0.2% (Briefing.com consensus +0.1%). The two readings are up a respective 0.7% and 1.2% on a year-over-year basis.

According to the CME's Fed Watch Tool, the probability of a rate hike at the December meeting has increased to 69.2% from 61.7% at the end of September. The firming rate hike picture also helped move the dollar and long-term rates higher.

The U.S. Dollar Index (98.11, +0.59, +0.60%) strengthened throughout today's session, which in turn weighed on dollar-denominated oil prices ($50.32/bbl, -$0.08, -0.2%).

The early rally reversed stating around 10:20 a.m. ET and coincided with some strengthening in the dollar, a reversal in oil, and fading gains in the financial sector (+0.5%), which had been up as much as 1.5% following some better than expected earnings results from JPMorgan Chase (JPM 67.52, -0.22), Citigroup (C 48.61, +0.14), and Wells Fargo (WFC 44.71, -0.04).

Rising treasury yields also worked to thwart the early rally. Higher-yielding sectors -- utilities (-0.6%), real estate (-0.3%), and telecom services (-0.2%) -- found it difficult to make any headway and general valuation concerns percolated with the jump in rates.

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, write us. Share with a friend.

By the numbers the weekly closing index numbers compared to the initial BULLISH recommendation closing numbers: 

Stock Market Closing Numbers
compared to Recommendation Numbers
	6/2/2016	10/14/2016	Difference
Dow Jones	17,838.56	18,138.38	299.82
Nasdaq	4,971.36	5,214.16	242.80
S&P 500	2,105.26	2,132.98	27.72

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