Market Direction Week of November 14, 2016©

Market Direction: BULLISH alert issued 11/10/2016 

Last Week Review: Stocks were higher on the week as the S&P 500 recorded its largest weekly gain in more than two years and the Dow Jones Industrial Average had its largest weekly gain since December 2011, closing at a record high on Friday. Stocks initially reacted negatively to the surprise election results – similar to how markets moved after Britain's surprise vote to exit the European Union, but rebounded sharply in early trading on Wednesday. We don't know exactly what will happen next with stocks or policies; however, since 1944, stocks have risen by an average of 12.2% over the two years following the election. While the president has many powers, stock and bond prices are closely tied to fundamentals that won't change quickly. So instead of speculating about what might happen, stay focused on the longer-term trends, most of them positive, including modest economic growth, rising corporate earnings, and slightly higher interest rates, providing the support stocks need to rise over time.

How the market finished last week, the S&P 500 up 3.8%, the Nasdaq up 3.8%, and the Dow up 5.4%.

This Week: Q3 earnings season is winding down now with more than 89% of S&P 500 companies’ reports already out.

Donald Trump’s election surprised the polls, but the market’s positive reaction surprised almost everyone. While the rally was immediate and volatility has fallen somewhat, caution for a few more days would be prudent.

The November employment report on 12/2 and the 12/14 FOMC meeting are the only remaining known volatility catalysts left in 2016. While the election is over, occasional bouts of volatility are still possible.  

Economic Calendar: Retail Sales (11/15), Empire State Mfg Survey (11/15), PPI-FD (11/16), Consumer Price Index (11/17), Leading Indicators (11/18) 

Some of the major earnings announcements on deck: AAP, HD, TJX, CSCO, ROST.

$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. Cha-ching.

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