Market Direction Mid Week Update©

Market Direction: BULLISH alert issued 11/10/2016

The stock market closed a strong month on a sloppy note as the S&P 500 (-0.3%) spent the day in a retreat from its opening high. The benchmark index narrowed its November gain to 3.4% while the Nasdaq Composite (-1.1%) underperformed, but still added 2.6% for the month. The Dow Jones Industrial Average (UNCH) outperformed today, staying true to its November (+5.4%) form.

Equity indices entered the day with an assortment of positive headlines to rally behind, but what we saw instead, was a continuation of the selling that showed up during the last hour of yesterday's session.

The positive headlines from this morning included:

• An official OPEC agreement to lower oil production to 32.5 million barrels per day
• Better than expected economic data, which supports the narrative that a December rate hike makes sense and is not being rushed
• News that Steve Mnuchin, who is known to be business-friendly, was nominated as Secretary of the Treasury
• Report that the European Central Bank is likely to extend its quantitative easing program past March

In the end, only the OPEC-related news stuck, preventing the S&P 500 from ending well below its flat line. The energy sector (+4.8%) extended its November gain to 7.9% while crude oil soared 9.3% to $49.44/bbl, ending the month higher by 5.5%. The big rally in crude began in overnight action, before the results of the OPEC meeting were known. A short squeeze likely played a part in the rally, especially when taking into account yesterday's bearish headline flow. On a side note, today's OPEC deal will put monthly supply back at levels from the start of the year, when hopes for a supply cut were already driving daily price action.

Energy was one of just four pockets of relative strength on the sector leaderboard. Financials (+1.3%) and materials (+1.1%) also posted solid gains while industrials (-0.1%) ended just ahead of the S&P 500 thanks to strength in transport stocks after rail carrier CSX (CSX 35.83, +1.03) raised its guidance.

Ahead of the Employment Report on Friday, the ADP National Employment Report showed an increase of 216,000 in November (Briefing.com consensus 160,000) while the October reading was revised down to 119,000 from 147,000.

$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, email us. Share with a friend.

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

Stock Market Direction Recommendation (11/10/2016)
Dow	up 417.41 points a 2.22% gain	11/30/16
Nasdaq	up 195.06 points a 3.74% gain	11/29/16
S&P 500	up 46.02 points a 2.15% gain	11/30/16

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